Payments Fraud

The trend of increasing card-not-present fraud reflects the strong growth in online spending by Australians.

MEDIA RELEASE

Sydney: 9 December 2014

Payments fraud trends a reminder to take care when Christmas shopping online

Today’s interim release of payments fraud data by the Australian Payments Clearing Association, the payments industry self-regulatory body, reflects the trends reported in “Australian Payments Fraud – Details and Data for 2013” in June 2014.

Today’s data, which are for the 12 months to June 2014, are available at www.apca.com.au. Complete payments fraud data for 2014 will be available in mid-2015.

The data show that compared to figures for the same period last year, the total rate of fraud on Australian cards and cheques increased from 16.1 cents to 18.7 cents per $1,000 spent.

This increase is largely due to a rise in card-not present-fraud mainly occurring online. Card-not-present fraud on Australian cards increased from $199.2 million to $256.1 million. The majority of this fraud (66%) occurred overseas.

The trend of increasing card-not-present fraud reflects the strong growth in online spending by Australians. In the four years to December 2013 online purchases increased by an estimated 140%. This compares to a 67% increase in card-not-present fraud over the same period.

APCA CEO Chris Hamilton said, “We all know that the economy is going digital, and this year even more people will be doing their Christmas shopping online. Along with the convenience of online global shopping comes a greater need to be aware of scams and to know who you are dealing with. The rise in online cross-border card fraud is a timely reminder to take special care this holiday season.”

Consumers can take simple steps to help stay safe when shopping online including:

• Only providing their card details on secure websites – looking for the locked padlock.
• Always keeping their PC security software up-to-date and doing a full scan often.
• Registering for and using their financial institution’s online fraud prevention solutions whenever prompted.
• Checking account statements and reporting any suspicious transactions to their financial institution immediately.

Australian consumers are not liable if fraudulent transactions are made on their accounts and will be reimbursed their funds as long as they have taken due care.

Retailers can take simple measures to help protect their businesses from online fraud including by taking advantage of the tools available such as online authentication methods American Express SafeKey, MasterCard SecureCode and Verified by Visa. Further information is available in APCA’s “Get Smart About Card Fraud Online” training.

Today’s interim release also shows that:

• Counterfeit / skimming fraud increased from $37.9 million to $42.0 million, well down from its peak of $66.0 million in 2011. This rise is largely due to ATM skimming attacks over the period. Continued vigilance by financial institutions and by the police, alongside the industry move towards chip-reading at ATMs, is crucial to limiting this fraud. Consumers should help protect against this type of fraud by covering their hand when entering their PIN at ATMs and point-of-sale devices.
• Lost and stolen fraud on Australian cards increased from $30.5 million to $33.1 million. This comprises a slight drop (-1.5%) to $20.5 million in the fraud occurring in Australia, but an increase (30.2%) to $12.5 million in fraud occurring overseas. Consumers are reminded to always keep their cards and PINs safe.

APCA’s next comprehensive payments fraud report “Australian Payments Fraud – Details and Data for

For further information visit:

APCA website: Get Smart About Card Fraud Online; Protect Your Pin; Safeguard Against Skimming ACCC website: SCAMwatch

Media contact:

Ida Turner, APCA Communications P: (02) 9216 4817 M: 0409 716 556 

Australian Payments Clearing Association Limited ABN 12 055 136 519
Level 6, 14 Martin Place, Sydney NSW 2000 Telephone +61 2 9216 4888 Email info@apca.com.au www.apca.com.au

Towards a Digital Economy

MEDIA RELEASE

20 December 2013

APCA releases new report on cheques and the digital economy 

The Australian Payments Clearing Association, the payments industry self-regulatory body, released today the second Milestones Report on the transition of Australian payments to the digital economy.

Today’s report shows that the rapid decline in cheque use is continuing as electronic alternatives become more convenient. Figures from the Reserve Bank of Australia show that for the year to June 2013, cheques use dropped 13.3% – down from 241 million to 209 million. This compares with a 12.5% drop for the year to December 2012.

APCA CEO Chris Hamilton said “When it comes to Australian payments, we are on the bridge to the digital economy. Our findings in 2012¹ predicted the irreversible decline of cheques. Recent trends suggest that they will be a rarity within five years. The pace of decline reflects the increasing uptake of convenient electronic payments.”

Today’s Report highlights the initiatives undertaken by financial institutions and Government to ensure a smooth transition to the digital economy for those that still rely on cheques. It notes that: 

• Same-day settlement for direct entry payments, which was introduced in November 2013, will support faster movement of value in routine electronic payments.
• The use of mobile phones for payments, in particular for online banking, is growing.
• APCA is coordinating a digital cheque clearing strategy to increase efficiencies in the cheque
• processing system.
• The industry is developing new real-time payments infrastructure which will improve electronic payments and provide another alternative to cheques.
• Initiatives to automate paper-based processes, such as SuperStream for superannuation payments and PEXA for electronic property exchange in the real estate industry, have made significant advances. 

“Towards the Digital Economy: Milestones Report” – Second Report is available at apca.com.au

Milestones Reports2are released twice a year to review progress against the action plan published by APCA in May 2012² . The next milestones report is due for release in mid-2014. 

ENDS

Media:

Ida Turner, APCA Communications Tel. (02) 9216 4817 Mobile: 0409 716 556

¹ “The Decline of Cheques: Building a Bridge to the Digital Economy” is available at www.apca.com.au

² See “The Decline of Cheques: Building a Bridge to the Digital Economy” 

Australian Payments Clearing Association Limited ABN 12 055 136 519
Level 6, 14 Martin Place, Sydney NSW 2000 Telephone +61 2 9221 8944 Facsimile +61 2 9221 8057 www.apca.com.au

Payments Fraud

Australians have embraced the convenience and benefits of online shopping, but need to take care as they do so.

MEDIA RELEASE

Sydney: 17 December 2013

Payments fraud in Australia

Payments fraud data released today by the Australian Payments Clearing Association, the payments industry self-regulatory body, show that the total fraud on cheques and Australian-issued payment cards increased by 2% to $290 million over the year to 30 June 2013. The rate of cheque fraud increased against a decline in overall cheque volumes, whereas the rate of card fraud decreased slightly as overall card activity continued to grow. 

The new figures, for the 12 months to 30 June 2013, show that:

• The rate of fraud on all Australian-issued payment cards¹ dropped from 47.4c to 46.1c in every $1,000 transacted. The overall amount of payments card fraud increased by 1% to $280.5 million. This is against an increase of 4% to $607.9 billion on the total amount spent by Australians on their cards.

• Cheque fraud increased from a historic low in 2012 but remained under 1c in every $1,000 transacted. The overall amount of cheque fraud increased by 26% to $9.9 million. This is against a 4% drop to $1,197.0 billion in the total amount transacted on cheques. 

Today’s data, including a breakdown of payment instruments by fraud categories, are available at www.apca.com.au. 

The figures show that card-not-present (CNP) fraud continued to represent the bulk of fraud on Australian- issued cards over the 12 month period. CNP fraud (occurring2mainly online) increased by 5% to $198.9 million. This is against a reported increase of more than 14% in internet shopping over the same period.

“Australians have embraced the convenience and benefits of online shopping, but need to take care as they do so. If merchants and consumers take simple precautions and make use of the security measures offered, we can all protect ourselves and beat the fraudsters”, said APCA CEO Chris Hamilton. 

Information on how online retailers can protect themselves and their customers is available at www.apca.com.au/getsmart. Retailers should look to use strong online authentication methods such as MasterCard SecureCode and Verified by Visa. Consumers are encouraged to register for and use their financial institution’s online fraud prevention solutions whenever prompted.

The figures also show that counterfeit and skimming fraud on Australian-issued payment cards dropped by 29% to $37.8 million over the 12 month period. This total consists of $24.3 million occurring in Australia - a 4% increase - primarily due to skimming at ATMs, and $13.5 million occurring overseas - a drop of 55%. 

“It is encouraging to see the hard work of financial institutions, card schemes and law enforcement paying off. Chip technology is having a significant impact on reducing card skimming at POS terminals. The industry is now moving towards chip-reading ATMs to close the loop on skimming fraud”, said Mr Hamilton.

Consumers can help protect against skimming fraud with simple measures like covering their hand when entering their PIN at an ATM. More tips for consumers are available at www.apca.com.au. 

Today’s figures indicate that as detection tools become more sophisticated, criminals are reverting to simple theft and deception to obtain cards. Lost and stolen fraud on Australian-issued cards increased by 33% to $30.4 million over the 12 month period. Within Australia, lost and stolen fraud increased by 32% to $20.8 million and overseas, by 33% to $9.6 million.

“The industry is working to make life harder for card thieves for example by phasing out signature authentication in favour of PIN by mid-2014. But nothing beats good old-fashioned vigilance – treat your card like cash and keep it safe at all times”, said Mr Hamilton.

Consumers are reminded to immediately report a lost or stolen card to their financial institution and to check their statements carefully for any unauthorised transactions.

Importantly, Australian consumers are not liable if unauthorised transactions are made with their cards and will be reimbursed their funds as long as they have taken due care. 

______________________________

¹ As from this release, APCA is no longer presenting separate fraud rates for proprietary debit cards and scheme credit, debit and charge cards. Instead, we present fraud rates for all Australian-issued cards. The reason for this is that the Reserve Bank no longer publishes data on activity for the separate card types. APCA will continue to release fraud data for these two card types at www.apca.com.au, but fraud rates will only be available for Australian-issued cards.

² NAB Online Retail Sales Index 

ENDS

For more information: Ida Turner – APCA Communications | +61 409 716 556 

More tips on how to protect against online card fraud

Tips for consumers:

• Always keep your PC security software up-to-date and do a full scan often.
• Only provide your card details on secure websites - look for the locked padlock.
• Register for, and use your financial institution’s online fraud prevention solutions whenever prompted.
• Check your account statements and report any suspicious transactions to your financial institution.

Tips for retailers:

• Use a fully hosted payment gateway provider to collect payments on your behalf.
• Watch for suspicious orders. Is the order unusually large for your business? Is the customer trying various cards in order to make a successful payment?
• Avoid shipping re-saleable goods to a temporary address (eg hotel) or to a PO box number.
• Never take payments on behalf of any other business or person.
• Only make refunds to the card originally used to pay for the goods.
• Take advantage of the tools available such as online authentication methods - MasterCard SecureCode and Verified by Visa. 

Australian Payments Clearing Association Limited ABN 12 055 136 519
Level 6, 14 Martin Place, Sydney NSW 2000 Telephone +61 2 9216 4888 Email info@apca.com.au www.apca.com.au