APCA’s latest release of payments fraud data for the year 2008 shows that while Australia’s total rate of fraud remains low by global standards, it has risen from 6.3 cents (2007) to 8.2 cents for every $1,000 of payments.
Further comparison shows that:
• Cheque fraud has remained relatively steady, increasing from 0.8 of a cent (2007) to 0.9 of a cent in every $1,000.
• Debit card fraud (that is, EFTPOS and ATM) decreased slightly from 7.2 cents (2007) to 6.6 cents in every $1,000.
• Credit and charge card fraud (that is, signature permitted and card-not-present) increased from 44.7 cents (2007) to 53.2 cents in every $1,000.
Payment fraud in every $1000
Despite the increase in credit and charge card fraud, Australia’s total payment card fraud rate remains relatively low when compared to other countries. At 32 cents in every $1,000, Australia’s debit card, credit card and charge card fraud rate is about a quarter of the UK’s which is the equivalent $1.20 in every $1,000.
The increase in credit and charge card fraud was driven by increases in Card-not-present (CNP) fraud and Counterfeit/Skimming, which continued to trend upward in 2008.
Industry measures to tackle CNP fraud include the implementation of enhanced data security standards for computer systems and encrypted data links. Financial institutions and card schemes are also working with merchants to implement an added layer of security for online transactions to better verify the cardholder’s identity through measures such as MasterCard SecureCode and Verified by Visa.
Australia’s best defence against counterfeit cards is to join the international move to fraud resistant chip cards and chip reading terminals. Within the next three years the vast majority of consumer card transactions in Australia will use chip-based authentication.
In addition to industry-wide initiatives, financial institutions make unceasing efforts in detecting and shutting down fraud attempts. Nonetheless, successful fraud prevention comes from sustained effort at multiple levels – industry, financial institution, merchant and consumer.
Consumers can do simple things such as keeping the pinpad covered when entering a PIN and staying alert for anything suspicious when using ATMs and other devices. Merchants can also play an important part by checking that the card hasn’t been tampered with and taking extra steps to verify the cardholder’s identity when accepting payments over the phone or internet.
Click here for APCA’s fraud data collection.