Debit card fraud in Australia has jumped over the last year according to the country's payments clearing association, driven by a spate of skimming attacks on ATMs and POS terminals.
Figures from the Australian Payments Clearing Association (APCA) for June 2008 to June 2009 show debit card fraud (EFTPOS and ATM) rose from 7.4 cents to 8.5 cents in every A$1000 transacted. The incidence of debit card fraud remained relatively unchanged at around two in every 100,000 transactions and total losses were A$19.15 million.
The associational blames skimming attacks for the rise. Australia has been a target for international criminal gangs intent on exploiting weaknesses in mag-stripe cards to steal money from bank customers.
In one of many incidences, police sent out an alert in March for a gang of thieves who looted A$500,000 from up to 5000 ANZ customer bank accounts using details obtained from a skimming device attached to a cash machine in Melbourne.
Earlier this month Commonwealth Bank of Australia moved to combat the problem by introducing anti-skimming kits across its entire retail network.
In contrast to the rapid rise in debit card losses, credit card and charge card skimming fraud experienced slower growth - up 5.1% this year compared to 59.7% in 2008.
Chris Hamilton, CEO, APCA, says: "The levelling off in skimming on credit and charge cards is good news and suggests that chip based authentication is starting to have an effect. Chip transactions at point of sale are already commonplace, but we estimate it will take another three years before the rollout is complete. This major industry programme is clearly the key to combating card present fraud,"
Although skimming losses fell, credit and charge card fraud (signature permitted and card-not-present) increased slightly from 51.5 cents to 52.8 cents in every A$1000 transacted, with total losses of A$147.81 million.
With fraud levels rising, Visa has stepped up its migration to chip and PIN cards. Following discussions with banks and merchants, a timetable has been set for the migration of around 14 million cards, 500,000 point of sale payment terminals and thousands of ATMs.
All new credit cards will be chip and PIN from January, with debit and pre-paid plastic updated from early 2011. Merchant POS terminals need to accept chip and PIN by April 2012 and ATMs by January 2011.