Latest Statistics re Payments Fraud in Australia
The Australian Payments Clearing Association (APCA), the payments industry self-
regulatory body in Australia, has released its latest fraud data for cheques, debit cards, credit and charge cards 
for the 12 month period ending 30 June 2008.
While Australia’s total rate of fraud remains low by global standards, the total rate of fraud (cheque and payment cards) has risen from 5.9 cents (2007) to 7.2 cents for every $1,000 of payments. Cheque fraud declined from 1.4 cents to 0.8 of a cent in every $1,000. Debit card fraud increased slightly from 7.1 cents to 7.4 cents in every $1,000. Credit and charge card fraud increased 30% from 38.6 cents to 50.2 cents in every $1,000 (5.02 basis points).
While increasing levels of fraud are always a concern, at 31 cents in every $1,000, Australia’s payment card (debit card and credit and charge card) fraud rate is well below the global equivalent, which is 47 cents in every $1,000.1 The UK has a payment card fraud rate of $1.18 in every $1,000.
Card-not-present (CNP) is the most common type of payment card fraud accounting for 48% of the fraud value on Australian issued credit and charge cards. This is also in line with what is observed in the UK, where CNP accounts for 54% of the payment card fraud value. CNP transactions are where the consumer and retailer don’t deal face-to- face such as over the internet, phone, mail and fax.
APCA’s Chief Executive Officer Chris Hamilton said, “In previous data releases we have highlighted rising levels of card-not-present and cross border fraud both in Australia and overseas. The latest figures reinforce the challenges of maintaining good security and the need for consumers to take extra care when shopping and doing business online.”
After CNP fraud, counterfeit/skimming represents 32% of the total value of fraud on credit and charge cards and 40% of the total value of debit card fraud. “Skimming” is where card details are captured for the purpose of producing counterfeit duplicates.
“Unfortunately, we are now starting to see a long anticipated migration of counterfeit and skimming fraud to Australia from offshore,” said Mr Hamilton.
Industry is tackling this type of fraud through measures such as the implementation of Data Security Standards to protect credit card data, and progressive rollout of fraud resistant chip cards and chip reading terminals.
“We estimate that within the next two to three years, the vast majority of Australian consumer cards will carry a chip and most processing terminals will be capable of using chip technology. Once transactions use chip-based authentication, opportunities for counterfeiting and skimming disappear,” said Mr Hamilton.
“Australia’s comparatively low level of fraud reflects the industry’s efforts in timely, targeted fraud prevention,” said Mr Hamilton.
Fraud remains a fraction of an overall increasing number of payments. Of the 3.8 billion plus transactions made on Australian issued cards in the 12 months to 30 June 2008, about 400,000 were fraudulent – or just over 1 in every 10,000 transactions.
“It’s important to remember that consumers are not held liable if fraudulent transactions are made with their cards or account information,” added Mr Hamilton.
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