Following an unprecedented spate of skimming attacks in Australia, the card payments industry has strengthened its focus on initiatives to combat fraud at EFTPOS terminals.
The recent attacks, although involving a comparatively small number of EFTPOS terminals, have targeted stores with high customer traffic. This has allowed criminals to capture a significant number of card details and PINs before fraudulent activity was detected. Criminals have used the data to create counterfeit cards and withdraw cash from customers’ accounts at ATMs in Australia and overseas.
Law enforcement agencies and financial institutions have acted quickly to limit the extent of this fraud. Police have made a series of arrests and are continuing investigations. Merchants have been warned to be alert and acquirers and the card schemes are working with those considered to be at ‘high risk’ on measures to secure EFTPOS terminals on their premises. APCA has issued a set of guidelines to assist acquirers’ efforts which provide merchants with tips on how to enhance the security around terminals.
In addition to reimbursing victims of the skimming fraud as swiftly as possible, the priority for issuers is to minimise fraud losses while limiting the impact on their customers. Replacement cards have been issued where necessary and PIN changes enforced for cards that may have been compromised. Many issuers have expanded their card fraud detection tools to cover debit card transactions, an initiative not previously considered necessary due to Australia’s low rates of debit card fraud.
While Australia had largely been free from such attacks, other countries (such as the UK and Canada) have experienced skimming fraud for some years. Australia’s card fraud rate has historically been about a third of the UK’s; however, as a result of the recent attacks APCA expects to see a significant spike in the figures for the 12 months to 31 December 2009, which are due for issue in May 2010.
Fraud protection needs to be approached from every level – industry, acquirer and issuer, merchant, and consumer. APCA is working with financial institutions and the card schemes on a number of long and short-term initiatives including the roll-out of chip and PIN technology, merchant and consumer education and information sharing. A consumer campaign to raise awareness about the importance of PIN protection was launched by APCA on 31 March 2010.