Do I get my money back if my credit card is hacked?

What is refund fraud?

Refund fraud involves the use of a terminal to issue an invalid refund with no corresponding spend. It is often committed by employees crediting refunds to their own account or that of their family/friends.  To avoid detection they may also use a stolen credit card to process a large purchase and then refund the same amount to a different account or card.

To protect your business from fraudulent refund activity, you must always process a refund to the same card that was used for the original sale. This is a clause within the CommBank Merchant Agreement.

We also recommend these steps:

• Closely monitor all refunds to ensure they have a legitimate corresponding sale
• Establish processes for only a small group of staff to process high value refunds
• Be alert to changes in staff behaviour or a sudden increase in their spending habits or wealth
• Never refund a card transaction if:
  The customer asks you to refund the transaction in cash, to a bank account, through Western Union or different card. Credit cards can accept refunds even if the card is reported as lost or stolen

If a customer asks you to do any of the above or if you’re suspicious of a refund request, call us immediately on 1800 230 177 for Australian based support 24/7.

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If there is a fraudulent transaction on your debit card, you are generally entitled to a refund. This is a case of money stolen from your bank account, and banks have clear policies and guidelines to follow to return that money to you.

However, if you're wondering "can I get money back from an incorrect bank transfer?", then the situation becomes a little more complicated.

Here's the difference between the 2, and the steps involved in trying to recover your money.

What to do if you spot a fraudulent transaction

Most debit cards come with a zero liability guarantee, which protects consumers against fraudulent transactions. Every card provider has a different criteria outlining what you can claim.

According to the Financial Rights Legal Centre, as a general rule, you are not liable for unauthorised transactions. Putting in a claim with your bank does not guarantee a refund, and a refund may be voided if you contributed towards the loss, for instance by sharing your Internet banking password with someone who then made an unauthorised transaction.

Regardless of your circumstances, these are the steps to take if you have had money taken from your bank account without permission:

Step 1. Contact your bank to block the transaction

If you spot a fraudulent transaction that has been made from your bank account, contact your bank immediately. It may be able to prevent further withdrawals. Note that if any disputed transactions are still in "pending" mode, they will generally need to be fully processed before your bank can initiate a dispute on your behalf. This can take 3 to 5 business days to process a transaction, or even up to 10 business days.

Step 2. Make a claim

If the transaction has been processed, your bank will be able to tell you the next steps to make a claim and try to get the money back, based on its own specific policies and procedures.

Step 3. Freeze your debit card

If someone has unauthorised access to your card or your card details, you need to prevent them from making any further transactions. Most banks will require you to cancel your card to protect your account from further fraudulent activity. Your bank will send you a new card, but this may impact any direct debits and auto-payments. You can do this in your mobile banking app, via Internet banking or by calling your bank.

Will the bank contact you about a fraudulent transaction?

Debit card providers often monitor transactions conducted on debit cards, using algorithms to help them establish a spending pattern for your particular card.

This allows them to identify transactions that seem out of place (for instance, transactions that take place in another city or country).

They can often prevent fraudulent transactions by calling you to confirm the payment. If you have no knowledge of the transaction, it will not be approved and any money removed from your account will be refunded.

While this is comforting, as the account holder, the onus is on you to monitor your account and ensure your credentials have not been compromised.

Fraudulent transaction vs dispute with a seller

A transaction that is made on your debit or credit card without your authorisation is a fraudulent transaction. This may include cards that are lost or stolen, fake, not received, or fraudulent as decided by a card company.

This is not the same thing as a dispute with a seller.

A fraudulent transaction is any transaction where the card was not used for its original intention, whereas a dispute refers to any transaction where the seller and the buyer disagree on an issue, such as the item not being the one the buyer purchased, or the price being different to what was agreed originally.

In the case of a dispute, your bank may still be able to assist you with getting your money back if:

• You’ve been charged multiple times for the same purchase.
• You were charged a higher amount than advertised for your purchase.
• You didn’t receive the goods and/or services you paid for.
• The items/services you paid for weren’t as described or were defective.

How can you prove if you have been scammed with a fraudulent transaction?

Before you contact the bank, you need to identify whether this is genuinely an unauthorised or fraudulent transaction or not. Consider the following:

• Did a family member or any other cardholder have authorised access to the account?
• Is the transaction related to a merchant you genuinely shopped with, trading under a different name?
• Was the transaction made in a foreign currency and converted into Australian dollars?
• Does the transaction relate to a regular membership or subscription you forgot about?

If you run through this process and you're still certain you've been scammed, contact your bank immediately to alert them to the issue and cancel your account.

Unfortunately, if you've given out your personal details to a scammer and this has contributed to your financial loss, the ACCC advises you're unlikely to get your money back. However, you can limit the damage and protect yourself from further loss by recovering your stolen identity, reporting your situation to ScamWatch and changing your online passwords.

Can you get your money back from an incorrect bank transfer?

This is different to an unauthorised transaction, as you were responsible for the mistaken transfer. The Financial Ombudsman Service Australia explains that if you do enter the wrong account or BSB number, the payment will be made to the wrong account or unintended recipient, which is known as a "mistaken Internet payment".

If you've made a mistaken Internet payment, you may be able to get your money back from an incorrect bank transfer, depending on the timing.

It's crucial that you contact your bank or credit union immediately. They will contact the unintended recipient's bank to try and get the money back.

If you report the mistake:

• Within 10 business days. The funds will be returned to you.
• Between 10 business days and 7 months. The recipient's bank has the ability to freeze the funds. The recipient then has 10 business days to prove they are entitled to the funds. If they can not do this, the funds will be returned to you.
• After 7 months. The funds will only be returned if the other person agrees.

If the money is still in the other person's bank account and you can prove the money was sent as a genuine mistake (which you can often prove if the account name and number don't match), the process for recovering will commence. This process can take weeks or even months. Even if you report the mistake immediately and you have a right to have the funds returned to you, the unintended recipient may not return the money immediately.

Which number do I call if I've had my debit card lost, stolen, or I suspect a fraudulent transaction?

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What are zero liability guarantees?

A zero liability guarantee is a guarantee offered by card issuers where a fraudulent or unauthorised transaction will not be completed. The money will not be removed from your bank account. You will need to have adequate proof in the form of correspondence to prove that the transaction was indeed unauthorised.

To benefit from a zero liability guarantee, you must file the claim as soon as possible, because some debit cards have a time limit on their zero liability guarantee. Also, not all debit cards offer this option.

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