What are the rights for victims of credit card fraud?

A fraudulent payment has been made with my credit card, but I have no idea where it came from - what are my rights?

Unless you've acted fraudulently or without reasonable care, most credit card companies should offer a full refund and the most you will be liable for is £50.

According to the Lending Code , credit card holders can be liable to pay up to £50 of a fraudulent transaction but only when they fail to inform their bank before the fraud takes place that they've had their card lost or stolen or someone knows their PIN.

If a credit card holder has their card lost or stolen or someone knows their PIN and they tell the bank before any fraudulent transactions take place, then they're not liable to pay anything.

In cases of card not present fraud, for example when a fraudulent transaction takes place and the card hasn't gone missing, there is no liability at all for the cardholder under the Lending Code.

The first step is always to get in touch with the credit card provider to notify and reclaim fraudulent transactions as soon as possible.

Refund refuseniks

Card companies can refuse to refund money, though, when the cardholder has voluntarily compromised their security.

According to the terms and conditions of American Express credit cards, for example, those who "contributed to, were involved in, or benefited from the loss, theft or [the card's] misuse" won't get a refund.

Writing the card's PIN on the card itself, keeping it written down in your wallet or telling someone else the PIN number will all result in the cardholder being liable for the full amount of any unauthorised transaction.

The good news is that the burden of proof lies with the credit card provider. In other words: they need to prove you're guilty.

Credit card fraud 101

You may or may not be reassured to know, that credit card fraud is a widespread problem.

One in three people have become victims of a crime which averages at one theft every nine seconds. In the UK alone around £1.2 million is lost every day, despite the advent of chip and PIN technology.

Card not present fraud includes unauthorised transactions that are made over the phone, using the internet and through mail order companies.

This is the most common form of card fraud and requires the criminals to obtain the card's details but not the card itself, nor the PIN number.

Card skimming is the most common form of fraud at cash machines. Fraudsters attach small cameras and card readers to ATMs.

These record the card's details as well as the PIN that is entered. Skimming can also be carried out in shops, restaurants and petrol stations. In these cases, a corrupt employee uses a separate device to electronically copy the card's data from its magnetic strip.

A whole new credit card can then be made using this information, and subsequently used in person with the PIN.

Fraudsters also commonly use the internet to obtain the details of other people's cards.

Common ploys include viruses that redirect browsers to fake websites that then encourage users to enter their card details. They may also send emails to try and direct people to the fraudulent sites ("phishing").

Online card fraud is relatively easy to avoid by making sure to use computers with up-to-date anti-virus software and only making purchases when the site's address begins with "https" and the security certificate (padlock) is up to date and correct for the site you're visiting. Additionally, only shopping with websites you know and trust is normally a good idea.

Skimming and card not present scams require more vigilance. Avoid cash machines that look tampered with and religiously check all statements. Also ensure that all correspondence relating to the card's details is either kept safe or thoroughly destroyed.

If a fraud has occurred, the first thing to do according to the UK Payments Administration is report the unauthorised card transaction to the relevant card issuer/bank.

Remember, the onus is on the card company to undertake further investigations and to report any criminal activity to the police.

Victims of card fraud may also want to contact the three credit reference agencies Callcredit, Experian and Equifax to check that no credit applications have been made in their name.