Card fraud flies offshore

The incidence of fraud on Australian issued payment cards increased 66 per cent from A$199 million to $256 million over the year to June 2014, with the majority of this occurring overseas, the Australian Payments Clearing Association said yesterday.

Over the last year, card fraud rates have grown from 43.6 cents to 48.7 cents for every $1000 spent. This is against an increase of four per cent to $624 billion on the total amount spent by Australians on their cards.

The trend toward card-not-present fraud reflects the strong growth in online spending.

Over the last four years to December 2013 online purchases increased by an estimated 140 per cent and compares with a 67 per cent increase in card-not-present fraud over the same period.

Counterfeit or skimming fraud increased from $38 million to $42 million, well down from its 2011 peak of $66 million (a peak that was due to a spike in ATM skimming attacks at the time).

'Lost and stolen' fraud on cards increased by 26 per cent to $34.0 million. This consists of $31.4 million on scheme credit, debit and charge card transactions (up 38 per cent) and $2.6 million on proprietary debit card transactions where PIN is mandatory (down 38 per cent).

Fraud on cards issued overseas increased by ten per cent from $46 million to $51 million, but was still less than half of the $119 million seen in 2008.

APCA said the lower figures seen since 2009 were mainly due to the growing use of chip and PIN on cards issued overseas, and the progressive rollout of chip-reading terminals at Australian merchants.