The latest payment card fraud data has shown a decline in the rate of fraud for the first time since reporting of card fraud commenced in 2006.
Figures released today by the Australian Payments Network (AusPayNet), the payments industry self-regulatory body, show the rate of card fraud for the 12 months to 31 December was 72.8 cents per $1,000 of card spending, down from 75.0c per$1,000 in the previous period.
The data also show a decline in the growth of card-not-present (CNP) fraud, which occurs when stolen card details are used to make online or phone transactions. The increase in CNP fraud in 2018 was 2.4%, compared to 13.9% the previous year. At $488 million, CNP fraud accounted for 84.9% of all card fraud in 2018, steady on the previous period.
Australians are not liable for any fraudulent transactions on their payment cards and will be reimbursed where they have taken due care.
Growth of 2.3% in all types of card fraud during the year, to $574 million, was significantly outstripped by 5.4% growth in card spending overall, to $789 billion.
The improved card fraud figures come as online retailers and payments service providers adjust to a new framework for reducing CNP fraud that took effect on 1 July.
Developed after close consultation with financial institutions, retailers, card schemes and other ecommerce participants, the CNP Fraud Mitigation Framework includes targets for card issuers to reduce CNP fraud and increased use of multi-factor authentication in verifying online transactions.
AusPayNet CEO, Andy White, said the latest fraud data were encouraging, showing both a decline in the fraud rate generally and a leveling-off in CNP fraud specifically.
“Reducing the space for CNP fraudsters to operate is an industry priority and the new framework is a major step in further stimulating the uptake of CNP fraud counter-measures across the ecommerce community.
“People buying goods online may have noticed enhanced steps to have their details verified and they should take confidence from that,” said Mr White. The AusPayNet data show a continued decline in card skimming/counterfeit fraud, down by 37% to $19.5 million, the lowest-ever level recorded.
“Chip technology has radically reduced counterfeit fraud,” Mr White said.
Fraud related to lost or stolen cards was up 37% to $55.5 million, accounting for 10% of all card fraud. To protect against theft, AusPayNet advises cardholders to always keep their card and PIN safe, install a lockable mailbox, clear mail daily and, if they are away for an extended period, to have their mail held at the post office or collected by a friend.
Mr White said there were also simple things consumers could do to help the fight against online fraud.
“Only provide your card details on secure and trusted websites - look for the locked padlock icon. Be wary of offers that look too good to be true and be suspicious of unsolicited emails and text messages from people you don’t know. Don’t click on links provided and never divulge confidential data such as your password,” he said. AusPayNet also advises that cardholders: • Register for and use their financial institution’s online fraud prevention solutions whenever prompted • Keep PC security software up-to-date and do a full scan often • Regularly check statements and report any unusual transactions to their financial institution immediately.
