A report released this month by the Australian Payments Network (APN) shows that nearly one in a hundred online credit card transactions are fraudulent.
The APN manages systems for cards, cash, cheques, electronic funds transfer and high-value payments, through the development and management of standards, rules and guidelines. The report found that in 2016, Australians used cards to spend a record $714.5 billion online, with fraud accounting for $534 million (0.74%) of card transactions. This is an increase of about 12% over the previous year.
As more consumers choose to shop online, criminals are taking advantage of this by using stolen credit card details to make transactions. According to the report, this accounts for 78% of fraudulent card transactions.
More transactions are carried out now by credit card than by cash, the Reserve Bank has found. This has put pressure on banks and financial institutions to set up safeguards against criminal activities. Although these measures are keeping banks ahead of crime, consumers also need to be alert to the problem.
As well as the online use of stolen card details, criminals are also using “ghost terminals”, fake ATM or EFTPOS terminals which are not connected to a legitimate payments network. These terminals copy and record card details, a practice known as “skimming”. The report found there has been a 13% increase in card skimming.
APN chief executive Leila Fourie told the ABC's AM program the ghost terminals are “highly sophisticated”, and can interact across the internet. It's very difficult to tell they are fake terminals at a glance.
The APN says Australia is well advanced in fraud detection, but crime and fraud “will always be with us”.
“The golden rule is to always treat your cards as if they were cash,” Ms Fourie said.
She added that the network will soon launch an education program to help consumers and businesses learn how to protect their card details and online identities.