The head of the Australian Federal Police (AFP) has warned banks in the country that the continuing use of magentic strip cards is leaving customers vulnerable to fraud and is urging the industry to speed up the introduction of chip and PIN technology.
AFP Commissioner Mick Keelty told delegates at an International Consumer Credit Card Summit that the magnetic strip and signature system is past its "use-by date", and no longer affective as high quality counterfeits have been produced for many years.
Keelty said delays in introducing chip technology has left Australia more vulnerable to identity fraud than most parts of Asia, Europe and the US.
"Research shows the reduction of credit card fraud in Asia as result of the chip enabled smart cards," said Keelty. "If we look at credit cards - there has been a positive reduction in fraud with the introduction of chip technology in some Asian countries."
Keelty pointed out that the introduction of chip and PIN technology in Malaysia has resulted in an 80% drop in counterfeit credit card fraud in the country.
Lost and stolen and counterfeit card fraud in the UK fell almost 30% in the six months following the nationwide introduction of chip and PIN cards at the point-of-sale, according to figures from Apacs. A similar domestic PIN-based system in France for debit cards has resulted in an 80% reduction in fraud since it was introducted in 1993.
His remarks coincided with an announcement by Visa International that is expects to double the number of chip cards on issue in Australia to more than one million during the coruse of the year. ANZ Bank has about 600,000 to 700,000 chip-enabled cards on issue, covering a minority of the bank's credit card portfolio.