Credit card crimes surpass one million

Small businesses impacted by an increase in online shopping fraud

The number of fraudulent card transaction surpassed one million in 2011, with total losses reaching a record $278 million, according to the Australian Payments Clearing Association (APCA)'s latest fraud statistics.

Figures indicate that the number of fraudulent transactions made on signature-based credit, debit and charge cards, as well as card-not-present transactions*, was almost double that of 2009. This also made up roughly 92 per cent of total fraudulent transactions.

The remaining eight per cent was made up of cheque and pin-based debit card fraud, which came to $8.8 million and $13.7 million respectively last year. The number of fraudulent transactions made via cheque was just under 900, while those made via pin-based debit cards totalled 39,000. Point-of-sale and ATM debit card fraud also fell from 2.5 to 1.3 for every 100,000 transactions made over the same time period; while cheque fraud contributed to less than one transaction in every 300,000 transactions.

Signature-based or scheme card fraud was not only the most common type of fraud, but was also the only category to experience an increase in the number of transactions, rising from 38 in every 100,000 transactions made in 2010, to 52 in 2011.
In particular, the number of card-not-present (CNP) fraud transactions accounted for 71 per cent of total scheme card fraud, of which more than half of the fraud occurred overseas.

According to APCA, this largely reflected an increase in online shopping activity, with more and more businesses - in particular SMEs - opting to offer their goods and services online. However, a failure to implement safe and effective practices can mean that these businesses are more exposed to card-not-present fraud.

"Tackling CNP fraud requires effort from everyone, from the retailer, through to financial institutions and card schemes, and in the end from the consumer," said APCA's CEO, Chris Hamilton. 

"We need Australians to know that tools to help protect against CNP fraud are readily available today. If you are a retailer selling online or a consumer shopping online, you need to be using these tools as well as other practical measures to stay safe online."

Despite the high incidence of CNP fraud, small businesses should not shy away from using the Internet to do business, as moving online can make a business more competitive and enhance sales. However, the APCA states that it is imperative to take the appropriate measures to protect themselves against the risks.

Over the coming months, APCA will be providing free training on how retailers can protect themselves when selling online. You can read more on how to safeguard against credit card fraud here.

*Card-not-present transactions refer to those made when the consumer is not face-to-face with the retailer, e.g. shopping online, by mail or phone. 

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