APCA's latest release of payments fraud data shows that in 2009 card fraud of all kinds (debit card, credit card and charge card) has stabilised at around 33 cents in every $1,000. Debit card fraud (POS and ATM PIN-only card transactions) increased from 5.8 cents to 9.4 cents in every $1,000 spent. Credit and charge card fraud (signature-permitted debit and credit card, and CNP transactions) dropped from 60.4 cents to 57.2 cents in every $1,000 spent. Within this total, PIN-only debit cards were hardest hit by skimming attacks and signature-permitted debit and credit cards by card not present (CNP) fraud.
Total rate of fraud on payment cards (cents fraud for every $1,000 spent)
Skimming fraud on PIN-only debit cards increased from around $5m to $17.5m. This gives a clear picture of the early financial impact of some well-publicised skimming attacks. As covered in the last Payments Monitor, in 2009 financial institutions and merchants responded to a number of well-organised skimming attacks on ATMs and POS terminals and the industry has acted quickly to limit the extent of the frauds. With recent successes in earlier detection, some arrests, and EPAL's announcement that chip technology would begin to be rolled out on PIN-only debit cards from 2011, the situation is expected to improve over time.
The data also shows that skimming fraud on Australian-issued credit cards (and signature-permitted debit cards) has dropped for the first time ever - from $50.1m to $37.5m. This suggests that Australia's progressive roll-out of chip technology is starting to bite against skimming fraud, which should continue to drop as the use of chip becomes more widespread.
Skimming Fraud
Against this, card-not -present (CNP) fraud on signature-permitted cards increased from $72.7m to $88.6m. CNP is where the consumer is not physically present for the transaction such as over the internet, phone and mail purchases. The trend towards CNP fraud and away from skimming fraud is consistent with what happened in the UK in the transition to chip. CNP fraud is now dropping in the UK, largely because of the growing use of industry countermeasures by merchants and consumers.
Fraud on Credit Cards (Skimming vs CNP)
More information on APCA's latest fraud data release is available here. APCA's fraud data collection is published on its website.