Sydney, 15 May, 2009: The Australian Bankers’ Association (ABA) analysis of payments fraud data for the last three years to the end of 2008 shows a decline in the rate of cheque and debit card fraud, but an increase in credit card fraud.

The ABA commented on today’s publication of payments fraud statistics by the Australian Payments Clearing Association (APCA)¹.

After falling to a low of 5.9 cents per $1000 over the 12 months to June 2007, total fraud has now increased to 8.2 cents per $1000, driven largely by credit card fraud.

The following trends are evident for financial institutions² :

• Cheques – the fraud rate per $1000 dollars fell to a low in mid-2008.  It has now increased off this low base but remains at a low level of 0.88 cents per $1000. The number of cheques written continues to fall.
  
  
• Debit card fraud shows a fall to 6.6 cents per $1000, and is currently at a series low;
  
  
• Credit and charge cards showed a small decrease over the calendar year 2006. Since then, the rate of fraud per $1000 has increased to 53 cents per $1000.
  
  

As in previous years, Australian fraud rates are still low compared with the UK. Over 2008, the debit card, credit card and charge card fraud rate in the UK was $1.12 per $1000 and in Australia it was 32 cents per $1000, which is less than a third of the UK fraud.

David Bell, Chief Executive of the ABA, said: “We have seen an increase in credit card fraud rates. Fraud on credit card transactions, in particular card-not-present transactions, such as those made online or via telephone, has increased, as well as fraud committed by criminals skimming the card information and creating counterfeit cards.” 

“Banks will continue to work to protect their customers. Our banks have systems to monitor transactions on a customer’s account, and if a transaction is identified as being suspicious, it will be investigated to ensure there is no breach of security. Occasionally your bank may contact you to verify a transaction.”

“The current regime protects the consumer. Account holders are not liable for losses resulting from unauthorised transactions where it is clear that the user has not contributed to the loss.”

Mr Bell said banks continue to make investments to protect their customers against fraud and are currently working on providing credit cards with chips and chip-reading terminals.

“Chip and PIN cards look the same as standard magnetic-strip cards, but many of the new credit cards now contain a computer chip. Customers can still sign for each purchase but now they have the option of entering their PIN instead,” Mr Bell said.

Chip cards cannot prevent all fraud. Customer accounts can still be compromised if the PIN is lost or stolen. Nor can chip cards address the fraudulent use of cards on the Internet to buy goods.

It’s still important for cardholders to take their own fraud prevention precautions when using their credit card, including when purchasing goods or services using the phone or the Internet, or withdrawing cash at the ATM.

Mr Bell said: “Customers should be wary, particularly when dealing with companies offering goods online. It’s important to shop using secure websites which use protective encryption technology to transfer information from your computer to the online merchant’s computer system, and which keeps confidential information such as your credit card details safe.”

“It is crucial that consumers continue to do their own research on the merchant they are purchasing from before placing an order. You should only do business with companies you know and trust.”

“When you are using an ATM, you should continue to protect your PIN by shielding it as it is entered into the machine. Finally, if you notice something unusual about the ATM, report it to your bank or other ATM owner immediately.”

“Unfortunately, criminals attach skimming devices to some ATMs to capture card and PIN details which they then use to create counterfeit cards or to access your account,” Mr Bell said.

For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
           
ENDS

[1] See APCA website for payments fraud statistics: www.apca.com.au
[2] It is important to note that the APCA data relates to financial institutions which include banks, building societies and credit unions. Data for banks has not been provided separately.