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Expats living in Australia need to keep a close eye on their UK debit and credit cards as retailers in the country increasingly move towards lowered security

Australia is among the most popular destinations for emigrating Brits, with over 100,000 moving Down Under between 2005 and 2010. While most living abroad open accounts in their new home, a 2010 study revealed that more than half those Brits that emigrated over five years ago retained a UK current account.

However, little-used cards that sit in a drawer forgotten could pose a big threat to those living Down Under. Last year, a payment system was introduced that removes the need for a pin or signature for transactions under AU$35 (£24). Companies involved so far include the country’s main supermarkets Coles and Woolworths (Xetra: 886853 - news) , McDonald’s and K-Mart. Unlike contactless payment systems, which only work with specially issued cards, the system works with existing cards, including those issued overseas, confirmed Mark Austin of Visa Europe .

“A UK card used at the participating merchants will work without a signature or PIN for transactions under AU$35. This is true whether the card is used via the chip or via the magstripe. It will work as long as the issuing bank approves this transaction; an issuer could choose to decline the transaction if they felt that it was too risky,” said Austin.

Consumer groups in Australia have raised concerns about these “time-saving” measures and the fact there is no way cardholders can opt out. Card issuers and retailers claim the low limit deters thieves, but fraudsters could still run up a big bill by making lots of small transactions.

However, the UK Cards Association confirmed that UK cardholders would not be liable if someone stole their card and used it in such a manner, so long as any unauthorised use was reported to the card issuer within 13 months as required by the Payment Services Regulations.

“If the retailer decided not to take a pin or a signature, the onus is on the bank to prove that the customer was negligent,” said a UK Cards Association spokesperson.

“In the case of fraudulent use, the cardholder is protected by the same liabilities and chargeback rights as in the UK,” added Austin.

Given that the Financial Ombudsman has said that dealing with complaints about disputed transactions forms a significant part of its workload, it seems banks can be difficult when it comes to unauthorised card use. Those living in Australia are advised to be extra vigilant about the whereabouts of all their cards and report any loss immediately.

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Expats in Australia warned about card fraud