How To Avoid Card Fraud

Invisible charges: standard card- and Apple Pay‑related payment frauds — and how to stop them!

This blog is a slightly heavier read, but being aware of the threat posed by card and payment fraud gives you the ability to help protect yourself against this crime. Card fraud not only empties your bank account but can also seriously disrupt your life due to the recovery process.

Paying with a physical card or using Apple Pay may feel quick and secure, but fraudsters have adapted their tactics accordingly. Some scams are obvious, like when someone steals your card and racks up charges. However, others are more subtle: your card or Wallet can be used without your knowledge. Below is a practical, non-technical guide to common types of fraud that affect cardholders and Apple Pay users. It includes an overview of how these scams work, warning signs to look out for, and specific steps you can take to prevent and respond to them.

Quick overview of how modern payments differ

A basic understanding of banking terminology helps determine payment methods when reviewing your transactions. The criminal relies on your ignorance!

• Card present (CP) — physical card or contactless tap at a terminal. Tampering here (skimmers, shims, tampered POS) targets credit card transactions.

• Card not present (CNP) — online, phone, or recurring payments where merchants only have the card number, expiry, and CVV. Most identity‑theft fraud is CNP.

• Tokenised wallets (e.g., Apple Pay) — the device uses a token instead of your actual PAN (primary account number). Tokenisation reduces some risks but doesn't eliminate them — attackers target device accounts, cloud backups, or merchant systems.

Fraud types you should know (and how they can happen without you realising)

1. Card skimming (at ATMs or POS terminals)

What it is: Criminals attach a skimmer to an ATM or payment terminal to read the magstripe and steal card data. A camera or fake keypad records PINs.

Why you might overlook: The terminal appears normal, and your card is returned as usual.

Warning signs: Loose or bulky card reader, mismatched colour or fit, tape or glue, tiny pinhole cameras above keypads.

Prevention: Use chip payments, inspect terminals, prefer indoor ATMs in banks, and cover PIN entry.

Note: Modern chip EMV transactions are more complex to clone than magstripe transactions, but skimming still harvests data for CNP fraud.

2. Shimming and NFC relay attacks (contactless)

What it is: A shim is a tiny device inserted into a card slot to read chip data; relay attacks extend the range of contactless payments, allowing a thief to capture a tap from a short distance.

Why you might not notice: Your card's chip or contactless function used without physical access, or a short‑distance relay triggers a payment without tactile signs.

Prevention: If you're concerned, keep cards in RFID-blocking sleeves. If your bank allows, consider turning off contactless payments on your cards. Also, avoid leaving cards unattended.

3. POS tampering & compromised merchants

What it is: Malware or hardware installed on merchant point‑of‑sale systems that captures card data during legitimate purchases.

Why you might not notice: Your receipt appears normal, and you have completed the transaction. The merchant's systems were stolen from, not your device.

Prevention: This is primarily the responsibility of merchants, but monitoring statements and setting alerts helps catch early abuse.

4. Card‑not‑present (CNP) fraud — online and recurring charges

What it is: Stolen card numbers used to pay for online goods, subscriptions, or test small amounts before bigger charges.

Why you might not notice: Fraudsters make small "trial" charges ($0.50–$3.00) to check validity or sign you up for low‑visibility recurring services. These often look like different merchant names on statements.

Prevention: Use virtual card numbers where available, review statements frequently, and enable bank alerts for every transaction.

5. Account takeover (ATO) and credential stuffing

What it is: Attackers use leaked passwords or social engineering to access your bank, Apple ID, or merchant accounts and add/remove payment methods.

Why you might not notice: They can add a card to a merchant account and place orders using stored shipping addresses, or add your card to a digital wallet that you don't regularly check.

Prevention: Use strong, unique passwords and 2‑factor authentication (2FA) on all financial and Apple ID accounts. Watch for unfamiliar devices on your accounts.

6. SIM swap and phone porting attacks

What it is: Criminals convince your mobile carrier to port your number to their SIM; they receive SMS 2FA and reset account passwords (including Apple ID).

Why you might not notice: Your phone may lose signal briefly; afterwards, attackers can control SMS 2FA. They can add cards, buy goods, or request verification.

Prevention: Use app-based 2FA (Authenticator, Apple's built-in) where possible, add a carrier PIN/passphrase, and monitor for loss of service.

7. Stolen or compromised devices (Apple Pay specific risks)

What it is: If someone has your unlocked device (or can unlock it), they can use Apple Pay. Also, if your Apple ID or iCloud is compromised, attackers may add cards to another device via iCloud.

Why you might not notice: Apple Pay payments can be made with a wrist (Apple Watch) or phone once authenticated; many transactions don't require an extra step that you'll see later. You might only notice on your statement.

Important detail: Apple requires biometric authentication (Face ID/Touch ID) or a passcode to authorise Apple Pay. However, if your device is unlocked (or stolen while unlocked) or your Apple ID/iCloud account is compromised, bad actors can exploit it.

Prevention: Require a passcode and biometrics, enable Find My and remote erase, sign out of iCloud, and remove cards immediately if the device is lost.

8. Merchant identity masking & confusing descriptors

What it is: Fraudulent merchants intentionally use confusing or legitimate‑sounding descriptors so charges appear to be from a different company (e.g., "PIXELSHOP" appears as "PIXEL" or a parent company name).

Why you might not notice: You don't recognise the merchant name and assume it was an authorised charge or a marketplace purchase. Small, recurring charges are particularly stealthy.

Prevention: Scrutinise unfamiliar merchant names, use banking apps that display merchant category and location, and contact your bank for charge details.

9. Social engineering & phone scams

What it is: Attackers call pretending to be your bank, Apple support, or a merchant and ask for card details, OTPs, or to install remote‑access software.

Why you might not notice: They seem authoritative and urgent; people disclose info to "resolve" a supposed problem.

Prevention: Never share your whole card number, CVV, or OTP over the phone. Hang up and call the organisation back on an official number.

10. Malicious apps and browser skimmers

What it is: Apps with hidden code can intercept payments or steal stored card details; websites can be infected with skimmers (Magecart) that capture checkout data.

Why you might not notice: The app or webstore appears legitimate; checkout completes normally.

Prevention: Install apps from official stores, keep devices updated, and use card tokenisation and virtual cards.

How frauds happen without you being aware — real‑world scenarios

• Silent recurring charge: A subscription slipped into fine print, or a merchant starts charging a recurring fee after a "free trial" and uses a name you won't recognise on the statement.

• Micro-transaction probing: Fraudsters test stolen numbers with small charges to see which ones are successful; these can go undetected.

• Stored‑card abuse on large retailers: Your card number in a big retailer's system is breached — fraudsters use stored credentials to place orders shipped to mule addresses.

• Apple Pay via paired device: Someone adds your card to a paired Apple Watch while your iPhone is temporarily accessible, then taps to pay.

• Cross‑merchant masking: A fraudulent merchant uses a legitimate parent company's descriptor to hide its identity on statements.

Detection: what to watch for right now

• Small, unfamiliar amounts (often $0.50–$5) — test charges.

• Charges from unfamiliar merchant names or different geographic locations.

• An unfamiliar device is listed in your Apple ID device list, or an unknown card is in your Wallet.

• Login/email alerts you didn't initiate (password change, new device sign‑in).

• Emails or SMS with shipping notifications for purchases you didn't make.

Prevention checklist (practical and prioritisable)

1. Enable transaction alerts on your bank/card for all charges (push or SMS).

2. Use virtual/one‑time card numbers for online shopping where available.

3. Enable strong authentication on Apple ID and bank accounts — prefer authenticator apps over SMS.

4. Lock your device: require a passcode and biometric authentication; enable auto-lock after a short idle period.

5. Keep Find My enabled and set up remote erase. Learn how to remove cards from Apple Pay remotely (see actions below).

6. Review statements weekly (or set weekly alerts). Look for small test charges.

7. Use bank/card controls — freeze your card in the app immediately if you're suspicious.

8. Prefer chip EMV over magstripe, avoid questionable ATMs.

9. Limit sharing of personal data online; use unique passwords and a password manager.

10. Add a carrier security PIN to prevent SIM swap.

If you spot suspicious activity — step‑by‑step

1. Immediately freeze the card or turn it off in your bank app.

2. Contact your card issuer to report fraud; ask them to block the card and issue a replacement. Ask how they'll handle refunds/disputes.

3. Remove the card from Apple Wallet and any linked devices. (On iPhone: Wallet → tap card → remove; remotely via iCloud.com or Find My).

4. Change the passwords for your Apple ID and any accounts that may be linked to the fraud; enable two-factor authentication (2FA) if it is not already enabled.

5. If your phone was stolen or compromised: use Find My to lock and erase, and notify your carrier (block SIM/port).

6. Review recent merchant charges — note the merchant names and dates for dispute purposes.

7. File a dispute with the card issuer and keep copies of communications.

8. Report identity theft to local law enforcement and any national identity/fraud reporting agency in your country if significant.

9. Monitor credit reports for new accounts or inquiries.

Apple‑specific actions (if Apple Pay or Apple ID may be involved)

• Remove card remotely: Sign in to iCloud.com → Account Settings → My Devices → select device → remove. Or use Find My to mark lost and remove cards.

• Change your Apple ID password and revoke app-specific passwords if you suspect a compromise.

• Check Wallet → Cards on all Apple devices signed into your Apple ID and remove any you don't recognise.

• Disable Apple Pay on a stolen device via iCloud/Find My, and inform your bank.

Final tips — keep friction low, protection high

• Turn on alerts — they're the fastest way to notice low‑value probing.

• Use virtual cards when shopping on untrusted sites.

• Treat Apple ID with the same caution as your bank account — it's a gateway to payment tools.

• If in doubt about a charge, call your bank; most issuers will quickly freeze a suspicious transaction and reverse fraudulent charges once you report them.