ABA comments on payment fraud data
Date: Dec 12, 2012
Categories: Data & Analytics, Risk and Regulation
Keywords: ABA, APCA
Sydney, December 11th 2012 – The Australian Bankers’ Association (ABA) said it is pleasing to see that fraud rates for debit and credit cards were either flat or showing small falls when compared with the previous release of data.
The ABA was commenting on today’s release of the Australian Payments Clearing Association’s (APCA) payment fraud data.
Steven Münchenberg, Chief Executive of the ABA, said: “The numbers show a fall from a peak in debit and credit card fraud which related to a data compromise involving a number of retailers. This crime led to increases in counterfeit and card-not-present fraud, but it looks as though the rates are coming down from those highs.”
“The banking industry recently congratulated the Australian Federal Police on the part they played in the arrest and charge of seven people by Romanian authorities in relation to the data compromise.”
The criminal syndicate had access to 500 000 Australian credit cards and approximately 30 000 credit cards have been used for fraudulent transactions amounting to more than $30 million.
No Australian card holders lost money as a result of these fraudulent transactions. Australian banks and other financial institutions reimbursed the financial losses of cardholders.
Mr Münchenberg said: “Another reason for the decrease is the rollout of Chip and PIN, which is reducing counterfeit skimming fraud. Card-not-present fraud has also decreased. This is because banks respond quickly to stop transactions on accounts when they identify suspicious transactions and also because of greater awareness in the online shopper community of the protective measures available to them.”
Locally and internationally, banks and card schemes are working with online retailers to implement additional security measures such as MasterCard SecureCode3 and Verified by Visa4.
Mr Münchenberg said: “These services are free and provide added security when you shop online by providing additional protection against unauthorised use of your bank-issued MasterCard or Visa credit or debit card.”
“Banks work hard to protect customers by identifying unauthorised transactions. If banks detect a suspect transaction, they will usually try to contact the customer to confirm the transaction. If the customer cannot be contacted, a staff member will decide whether to block the card until the bank can talk to the credit card holder.”
Comparing the latest results (for the 12 months ending June 2012) with the previous release (12 months ending December 2011) shows that:
Total fraud (cheque and payment cards) rates have fallen from 16.3 cents to 15.6 cents in every $1000 transacted. The incidence of fraud is relatively flat, moving only slightly from 21.3 to 21.4 in every 100 000 transactions.
Cheque fraud rates continue to fall and are now less than one cent (0.6) in every $1000 issued. The incidence fell to around 1 in 335 000 cheques issued.
Proprietary debit card fraud is flat at 4.9 cents in every $1000 transacted. There’s been a small fall in incidence from 1.3 to 1.2 in every 100 000 transactions.
Scheme credit, debit and charge card fraud has shown a solid fall from 96.0 cents to 87.7 cents in every $1000 transacted. The incidence is relatively flat, moving from 51.7 to 51.6 in every 100 000 transactions.
Customers can also protect themselves by following some sensible steps to protect their financial information, especially when shopping online.
Mr Münchenberg said: “Before making a purchase, it’s important that you do some research on the merchant, so that you can be confident that you are transacting with a business that you can trust and that will protect your personal information, including your credit or debit card details.”
“When buying online, sometimes businesses request large amounts of information they don’t need, so think about limiting the amount of information before providing it. Never send your credit card number by e-mail. E-mails are not secure.”
“Businesses – both large and small – need to be vigilant when it comes to security around transactions. Businesses need to consider the physical security of their merchant terminals, potential vulnerabilities in their business information systems; and the security of any online presence including business web pages and online transaction systems.”
Re-disseminated by The Asian Banker