Australian CNP fraud on the rise

Source: AusPay

The payments industry self-regulatory body Australian Payments Network (AusPayNet) today urged Christmas shoppers to continue to be alert when shopping online, as it released data showing card-not-present (CNP) fraud continues to account for the bulk of card fraud.

Data for the 12 months to 30 June 2018 (FY18) shows that while Australians’ spending on cards was up 5.1% to $767 billion in the period, card fraud grew more slowly, increasing by 4.8% to $565 million.

The FY18 data shows counterfeit/skimming fraud continues to plummet in the face of protection offered by chip technology. This type of fraud dropped from $42.3 million to $23 million, another record low, and now accounts for only 4% of all fraud on Australian cards.

CNP fraud was up 7.8% to $478 million and made up 85% of all fraud on Australian cards in the period, compared to 82% in FY17 (and 85% in the 2017 calendar year).

CNP fraud occurs when valid card details are stolen and used to make purchases or other payments without the card, typically online or by phone.

AusPayNet CEO, Dr Leila Fourie said that in line with global trends, criminal elements are increasingly attracted to the opportunity presented by growth in ecommerce, especially as chip technology has reduced avenues for other types of card fraud.

“Combatting CNP fraud is now a key priority across the entire e-commerce community and we’re delighted with the strong progress made this year on a framework for mitigating CNP fraud. We expect this whole of industry approach will help reduce CNP fraud, in the same way chip technology is tackling skimming fraud,” said Dr Fourie.

Following extensive consultation in recent months, the CNP Fraud Mitigation Framework has been agreed by the e-commerce community including card issuers, retailers, merchant acquirers, card schemes, payment gateways, payment service providers, regulators and industry bodies. Key elements will include targets for card issuers to reduce CNP fraud, and increased use of multi-factor authentication, including biometrics, in verifying CNP transactions.

Australians are not liable for any fraudulent transactions on their payment cards as long as they have taken due care. Dr Fourie said it was important that shoppers took certain steps when making online transactions, particularly during the peak holiday shopping period.

“Only provide your card details on secure and trusted websites - look for the locked padlock icon - and be wary of offers that look to good to be true. Fraudsters count on us being less careful during busy periods,” Dr Fourie said.

“Malware and phishing attacks are becoming increasingly sophisticated, so treat unsolicited emails and text messages from people you don’t know with suspicion. Don’t click on the link provided and don’t be tricked into divulging confidential data such as your password,” she said.

Other steps online shoppers can take include:

• Registering for, and using their financial institution’s online fraud prevention solutions, whenever prompted • Doing checks to make sure the business is legitimate • Always keeping PC security software up-to-date and doing a full scan often • Regularly checking statements and reporting any unusual transactions to their financial institution immediately

The FY18 data also showed that lost and stolen card fraud was up from $38.5 million to $51 million, equating to 9% of all card fraud. Dr Fourie reminded cardholders to always keep their card and PIN safe to protect against lost and stolen card fraud, including mail theft. People are advised to install a lockable mailbox, clear mail daily and, if they are away for an extended period, to have their mail held at the post office or collected by a friend.
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