What can we learn from a 2016 New Zealand credit card fraud investigation

Fool me once, shame on you; fool me twice, shame on me! Here's how to protect yourself from credit card scammers.


An extensive Kiwi credit card fraud was foiled in 2016 when police arrested two of the gang when they were in the act of withdrawing cash from an ATM.

The gang of four Romanians skimmed credit cards from accounts in one country, before moving on to another to spend the fraudulently gained money. In this manner, they were able to keep ahead of each countries law enforcement agencies. They had travelled to New Zealand, via Australia and the United States.

ASB staff noticed irregular transactions appearing on customer’s accounts and contacted the police. Auckland police undertook a stakeout operation and managed to catch the gang in the act of withdrawing money. Later, police discovered skimming apparatus at their base, including blank cards, pinhole cameras and card readers and writers. They also found 96 hours of tape that showed bank customers entering their PINS at three different banks.

Customs are increasingly turning away individuals thought to be skimmers, either before they board their flight or when they arrive in New Zealand.

Safe Shopping – how to protect yourself when shopping online

Avoid online spending sorrow

According to IDCARE, “National Identity and Cyber Support” for New Zealand and Australia, 300,000 Kiwis had their identity stolen in 2016, and half of those suffered financial loss. New Zealanders also lost $1 billion through identity theft and scams in the same year. So, how can we protect ourselves when paying with plastic?

When shopping online, if you notice any suspicious charges or goods don’t arrive or arrive broken, if you pay with a credit card, you can dispute it with your provider. Remember to use a safe and secure website. When you insert your details to pay for merchandise online, look in the address bar. If the address starts with “https” it’s secure, but if it starts with “http” it’s unsecured. Secure websites may also show a small padlock near the bottom of the browser screen or in the address bar depending on the browser you use. Secure sites use protective encryption technology when transferring your credit card details to the shopping website.

It is good practice to research the website you’re about to make a purchase on and read any security or privacy information available. Speaking to previous long-term users of the site can also minimise credit card risk.

Finally, if you’re an online shopping addict make sure your computer is protected with firewall and antivirus software to make sure your information isn’t stolen from your end.

At the ATM and in-store shopping

Knowing how to protect yourself when withdrawing money from an ATM or purchasing something in a store can also reduce the risk of fraud.

Usually, ATM fraudsters attach a skimmer near the card reader entry. Check to see if there’s any glue or tape residue around the slot to find out if the ATM is safe.

In addition to a card skimmer, there may be a camera disguised behind fake panels or hidden in the leaflet box which can be used to record you while you enter your pin.

If you’re buying something in a store, make sure your card isn’t taken out of your sight to make a purchase, and if you notice an unusual transaction, which you think may be a skimming fraud, contact your provider immediately.

General tips to avoid credit card fraud

While the tips above may help you to avoid nasty surprises shopping online or in person, here are some ways to make sure your credit card details are not stolen and used by criminals. The following information is taken from the New Zealand Bankers Association website, which provides information to educate Kiwi consumers about fraud.

  • Don’t share your bank account login details, cards, PINS or passwords with anyone – not in person, online, over the phone, or in emails or texts. Your bank will never ask you for this information.
  • If you have to send money to anyone using your credit card, make sure you trust them.
  • Safeguard your card. Treat it like cash. Don’t leave it lying around. Make sure you know where your card is at all times. Do not give your card to anyone else to use.
  • Protect your PIN. Never tell anyone your PINs or passwords – not even the police, bank staff, friends or family.
  • Cover up. When entering your PIN number at ATMs and EFTPOS terminals, shield the PIN pad with your other hand. Criminals may ‘skim’ your card details by attaching a device to the card reader, and then ‘shoulder surf’ or use hidden cameras to record your PIN.
  • Contact your bank immediately if you lose your card or you think the security of your card has become compromised in any way.
  • Check your statements and/or review your transactions regularly. Advise your bank immediately of any unauthorised transactions.

When you make a payment with a credit card, your provider sends the funds to the merchant’s provider through a financial service such as Visa, Mastercard or American Express. Each of these providers has its own way of protecting customers from scams.

Visa credit cardVisa

Smart cards. One of the more noticeable security features to be added to credit cards around the world is the security chip. Making a payment using a chip rather than a magnetic strip means you’re protected against the card skimming mentioned above.

Verified by Visa. Visa also have “Verified by Visa”, a service which sends you an SMS when you buy online to confirm it’s you making the purchase. All you need to do is set up your Verified by Visa details with your credit card provider, and look for the logo when shopping online.

Zero Liability policy. Visa also has a “Zero Liability” policy, which means you are never held responsible for fraudulent charges made using your card.

Mastercard credit cardMastercard

In addition to chip technology in cards and a zero liability policy, Mastercard also has an SMS verification system like Visa.

Mastercard SecureCode. This is a similar service to Verified by Visa and provides you with a code from your bank before making a payment.

American Express

Fraud Protection Guarantee. Similar to the zero liability policy Mastercard and Visa offer, American Express will not hold you responsible for any fraudulent charges, provided all due care is taken.

Secure system. American Express offers its own credit cards, which is unique in comparison to Mastercard and Visa. Therefore, if you use an American Express credit card, you eliminate one of the intermediaries and decrease the number of ways you could be scammed.

Early detection system. American Express monitors your transactions for suspicious activity, just as any provider does, and will contact you if it notices anything out of the ordinary.

Identity crime in New Zealand will only keep increasing, as more people use credit cards and the internet to purchase goods. Criminals will become more sophisticated in the way they commit fraud, so you should become acquainted with the different methods they use to use to gain access to your money. However, even if fraud, including credit card, is on the rise, it doesn’t mean you have to resort to less convenient ways to make purchases. If you follow the above tips when making a purchase or withdrawing cash, then your money will stay safe.

Credit card fraud, traps and scams guide

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