The payments industry self-regulatory body Australian Payments Network (AusPayNet) today urged Christmas shoppers and retailers against complacency as the latest industry data shows a decline in card fraud.
Data for the 12 months to 30 June 2019 (FY19) showed that in the face of a 4.2% boost in total card spending to $799.4 billion, overall card fraud dropped by 6.9% to $527.8 million.
The drop continues the trend of declining card fraud rates identified in the data for 2018 released in August 2019.
According to the FY19 data, card-not-present (CNP) fraud dropped by 5.0% on the previous FY to $455.5 million as the industry has adopted secure technologies such as tokenization, EMV 3-D Secure, real time monitoring and machine learning.
CNP fraud occurs when valid card details are stolen and used to make purchases or other payments without the card, typically online, and in FY19 accounted for 86.3% of all fraud on Australian cards.
Australians are not liable for fraud on their cards and will be reimbursed as long as they take due care.
Fraud involving lost or stolen cards fell by 16.1% to $43.0 million in FY19 and counterfeit/skimming fraud fell by 19.2% to $18.6 million, the latter extending a consistent trend since chip technology was progressively rolled-out in the card system over the last decade.
AusPayNet CEO Andy White said that while the reduction in fraud was encouraging, there was no room for shoppers to be complacent as the peak Christmas retail season heated up.
“Fraud involving CNP transactions remains by far the largest category of fraud. Ecommerce volumes have grown rapidly, and this space has attracted criminal groups as security technology makes other types of card fraud less attractive,” Mr. White said.
Today’s data covers the period ending immediately before 1 July 2019, when the industry’s key initiative to counter online fraud, the CNP Fraud Mitigation Framework, took effect.
“Our Framework is a whole-of-industry approach that brings together stakeholders to reduce the space available for CNP fraudsters. We look forward to tracking the impact of this initiative in coming years,” Mr. White said.
The CNP Fraud Mitigation Framework is the result of extensive collaboration across the e-commerce community including card issuers, retailers, merchant acquirers, card schemes, payment gateways, payment service providers, regulators and industry bodies. Key elements include targets for card issuers to reduce CNP fraud, and increased use of multi-factor authentication, including biometrics, in verifying CNP transactions.
“But that’s no reason to be complacent – fraud protection needs to happen at every level and it’s important that online shoppers also take steps over this busy Christmas period,” Mr. White said.
“Only provide your card details on secure and trusted websites. Look for the locked padlock icon and be wary of offers that look to good to be true – fraudsters count on shoppers being less careful during busy periods,” he said.
“Malware and phishing attacks are becoming increasingly sophisticated, so treat unsolicited emails and text messages from people you don’t know with suspicion. Don’t click on the link provided and don’t be tricked into divulging confidential data such as your password.”
Other steps online shoppers can take include:
- Regularly checking statements and reporting any unusual transactions to their financial institution immediately
- Registering for, and using their financial institution’s online fraud prevention solutions, whenever prompted
- Doing checks to make sure the business is legitimate
- Always keeping PC security software up-to-date and doing a full scan often