Card-not-present fraud rises to $299.5m: APCA

Card-not-present fraud increased from $210.4 million in 2013 to $299.5 million in 2014 according to a new report by the Australian Payments Clearing Association (APCA).

Card-not-present fraud occurs when details of credit or debit cards are entered online, over the phone or by post. This method has become favoured by criminals because it is difficult for a merchant to verify that the card owner is authorising a purchase.

Australia Payments Fraud — Details and Data found that card-not-present fraud accounted for 94 per cent of the increase in fraud.

$200.6 million of card-not-present fraud occurred overseas in 2014, up from $124.5 million in 2013.

APCA attributed the increase to cyber criminals targeting the online space as chip card technology becomes more widespread.

“As criminals continue to increase their focus on cyber space, the industry is working to respond with innovative fraud prevention measures,” said APCA CEO Chris Hamilton.

For example, the payments industry is rolling out tokenisation.

“This is a technique that replaces sensitive information, such as a card number, with a non-sensitive replacement value or token. If captured, the token itself cannot be used for normal card-not-present transactions and as such is of no value to criminals,” said Hamilton.

The report also found that counterfeit/skimming fraud increased from $36.1 million in 2013 to $42.1 million last year. This was due to an increase in skimming attacks on ATMs over the last year.

However, the industry is trying to counter these attacks with the roll out of chips on debit cards, moving to chip-reading at ATMs and mandatory PIN authentication on most cards from November 2014.

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