Fraud perpetrated on Australian credit and debit cards rose to $183 million over the last financial year, from $167 million in the previous financial year according to new data from the Australian Payments Clearing Association (APCA).
The biggest increase occurred in fraud perpetrated on proprietary or brand name credit cards, where PIN’s were also compromised, leaping from $18 million in the 2008 to 2009 financial year, to $27.5 million in the current financial year.
That figure includes fraud committed using counterfeit cards containing stolen information which resulted in $22 million in fraudulent transactions over 70,000 incidents.
$1.8 million was stolen by criminals who used compromised PIN’s, whilst fraud committed using PIN’s of lost or stolen cards fell slightly to $3 million.
According to APCA, debit card fraud is defined as fraud involving PIN only protected cards, which are used at ATM’s or for EFTPOS transactions. Scheme credit, debit and charge card fraud is defined by the agency as including signature protected cards and card not present transactions.
Card not present fraud, where stolen account data is used for transactions over the internet, phone or mail rose from $82 million to $102.6 million, whilst skimming declined to $35.5 million from $45 million.
Fraud committed in Australia using cards issued by international lenders fell to $68 million from $105.5 million.
Chris Hamilton chief executive of APCA says criminals are increasingly focusing their attention on card not present situations which do not require chip or PIN security.
“This is consistent with what happened in Britain during the transition to chip,” he said. “Fraud where the consumer is not physically present for a transaction increased by 25 per cent in the past year, and now accounts for 52 per cent of all frauds on locally issued credit, debit and charge cards. Wider and better implementation of the Payment Card Industry Data Security Standards to tighten controls around card information, as well as improved authentication methods, are critical to reducing this type of fraud. We encourage internet shoppers to register a password when prompted to do so online.” Mr. Hamilton said.
Credit and debit card customers are not liable for fraudulent transactions conducted using their credit card, provided it is established that the customer exercised reasonable care such as protecting PIN’s and looking for suspicious behaviour whilst using store payment devices and ATM’s.
Mr. Hamilton says there is strong evidence that chip technology was having a positive effect on protecting both businesses and consumers from fraud.
“Skimming fraud is dropping significantly as financial institutions and merchants progressively roll out chip,” he said. “This is making Australia less attractive for fraudsters from other countries.”