Australia’s ongoing migration to using chip technology on payment cards instead of magnetic stripes, which the country will complete in 2013, should reduce the country’s card-fraud losses, according to the Australian Payments Clearing Association, a self-regulatory body of the Australian payments industry.
Card fraud should drop sharply in the coming years, especially because chip technology is making Australia less attractive to fraudsters, Chris Hamilton, the association’s CEO, noted in a Dec. 7 report.
For now, however, fraud losses are rising, the association says. Australia’s card-fraud losses on all credit and debit cards rose 9.6% during the 12 months ended June 30, to AU$183 million (US$181 million or 137 million euros) from AU$167 million in fiscal 2009. Some 748,813 cases of debit and credit card fraud occurred in fiscal 2010, up 40.9% from 531,518 the previous fiscal year.
Fraud attempts using network-branded cards rose to 34 incidents per 100,000 transactions from 28 in fiscal 2009. However, fraud on network-branded signature-debit and credit cards dropped to 58.6 cents per AU$1,000 transacted from 60.1 cents, the association says. The association attributes the slight drop to the introduction of chip technology, which has resulted in reductions in skimming-related fraud in which crooks capture information off of cards’ magnetic stripes.
The group valued the losses from fraudulent transactions on branded cards at AU$155.5 million for fiscal 2010, up 4.9% from AU$148.2 million. The number of fraudulent transactions totaled 662,697, up 37.1% from 483,384 the previous fiscal year.
Proprietary (PIN-only) debit card fraud at the point of sale and at ATMs increased to 10.7 cents per AU$1,000 from 7.4 cents. The value of the proprietary debit card fraud totaled AU$27.8 million in fiscal 2010, up by 45.5% from AU$19.1 million, the association says.
In addition, the incidence of proprietary debit card fraud rose to three per 100,000 transactions from two in fiscal 2009. The number of fraudulent transactions grew by 77.6%, to 85,486 from 48,134.
The increase in fraud on proprietary debit cards was predictable and is attributable to the well-publicized skimming attacks on ATMs and payment terminals that occurred in Australia in late 2009 and early 2010, according to the association.
During that time, criminals were hacking and modifying the EFTPOS terminals used domestically in Australia to capture card information the PINs to create counterfeit cards.
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