Payments Fraud

"Chip card technology and extensive use of PINs is giving us a real chance to stamp out card skimming."

MEDIA RELEASE

Sydney: 6 June 2013

Payments fraud in Australia declines in 2012

Payments fraud figures released today by the Australian Payments Clearing Association (APCA), the payments industry self-regulatory body, show a year-on-year drop for the first time since 2006 when publication began.

The new figures for the 2012 calendar year show that the total amount of fraud on Australian cheques and payment cards dropped by 10% to $270m. When calculated as a proportion of the total amount transacted by Australians using these payment instruments, fraud dropped from 16.3c to 15.0c in every $1,000 transacted. Within this total:

• Cheque fraud remained under 1c in every $1,000 transacted. 
• Fraud on all Australian payment cards dropped by 11% to $261m. The rate of fraud dropped from 51.5c to 43.5c in every $1,000 transacted.
• Scheme credit, debit and charge card fraud (signature-permitted debit, credit and charge cards and card-not-present (CNP) transactions) dropped from 96.4c to 79.3c in every $1,000 transacted.
• Proprietary debit card fraud (PIN-only cards – POS and ATM transactions) increased from 4.9c to 5.4c in every $1,000 transacted.

Today’s figures, including a breakdown by fraud types, are available at www.apca.com.au.

Counterfeit and skimming fraud on Australian-issued scheme credit, debit and charge cards - used domestically and overseas - dropped by 53% over the past year to $27.6m, the lowest level since 2006.

APCA CEO Chris Hamilton said “This promising news reflects the sustained effort of card schemes, financial institutions, merchants and law enforcement agencies. Chip card technology and extensive use of PINs is giving us a real chance to stamp out card skimming. This allows the industry to devote more preventative effort to online fraud, which continues to be a challenge as the internet becomes an ever larger part of daily life.”

Over the past year, CNP fraud (occurring mainly online) dropped by 8% to $183m. This is against an increase of more than 20%¹ in internet shopping over the same period. The drop in CNP fraud can largely be attributed to an increase in the use of authentication tools such as MasterCard SecureCode and Verified by Visa, as well as dedicated fraud prevention tools.

Mr Hamilton said that while this first drop in CNP fraud is encouraging, there is no room for complacency. “It is essential that retailers and consumers get smart about online card fraud by taking some simple but powerful security measures when on the Net.”

Information and video case studies on how small online retailers can protect their businesses and customers from card fraud are available at www.apca.com.au/getsmart. 

The total amount of fraud on proprietary debit cards remained low at $16m. This is despite a 30% increase to $9.5m in counterfeit and skimming fraud, primarily driven by skimming at ATMs and in taxis over the year.

“Helping to prevent this type of fraud can be as simple as watching how your card is swiped and making sure to protect your PIN with your hand when entering it at POS terminals and ATMs,” said Mr Hamilton.

More tips on how consumers can protect against skimming fraud are available at www.apca.com.au/protectyourpin

Despite the overall decline, today’s figures also show an increase in fraud occurring on lost and stolen cards. As fraud detection tools become more sophisticated, criminals tend to revert to theft or deceiving consumers to hand over their cards or PINs. 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.

For further information

Contact: Ida Turner, APCA Communications
P: (02) 9216 4817 M: 0409716556

ENDS

How to protect against online card fraud

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.

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. 

• ¹ NAB Online Retail Sales Index 

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