Industry Framework to Prevent Card-not-Present Fraud

The release of Australian Payments Network’s (AusPayNet) card fraud data for 2017 shows card-not-present (CNP) fraud accounted for 85% of all fraud on Australian cards.

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.

As consumers spent more than ever on cards, the overall value of card transactions grew 5% to $748.1 billion. The value of fraudulent transactions grew in line with this total, increasing 5% to $561.4 million.

Card-not-present fraud now accounts for 84.8% of all fraud on Australian cards. Online card fraud increased from $418.1 million in 2016 to $476.3 million in 2017 – up 13.9%.

The rate of card fraud increased marginally from 74.8 cents to 75.0 cents for every $1,000 transacted.

“This is the trend, and the Australian industry has mobilised to ramp up the uptake of prevention measures,” says Dr Leila Fourie, AusPayNet CEO.

The total amount of fraud on proprietary debit cards dropped from $23.7 million in 2016 to $16.9 million – down 28.6%. This decrease can be attributed to a 35.5% drop in counterfeit / skimming fraud, down to 11.9 million.

Counterfeit / skimming fraud on all Australian cards fell 47.8% in 2017 to $30.9 million, the lowest level since 2006. This can be attributed to two factors: the transition to chip reading ATMs in Australia, and more countries upgrading to chip technology throughout 2017.

Online fraud now accounts for 85% of all fraud on Australian cards, totalling $476.3m in 2017 – up 13.9%. The percentage increase has slowed over the past three years, reflecting the progressive uptake of prevention measures.

In relation to this, AusPayNet announced the start of an industry consultation on a new framework to accelerate the fight against online card fraud.

Key elements of the CNP Fraud Mitigation Framework include:

  • Targets for card issuers to reduce CNP fraud across their card base
  • Merchants who record fraud above an agreed industry benchmark being required to use multi-factor authentication, except for exempt (low-risk) transactions
  • Boosting the use of tokenisation and compliance with card-security standards (PCI DSS)
  • Encouraging use of biometrics in authenticating CNP transactions“Through the framework, we are taking a leading-edge approach to tackling the global problem of increasing online card fraud,” said Dr Fourie.

The consultation period has commenced, with responses required by Friday 28 September 2018. For further details on the framework and consultation process, click here.

Some simple things people can do to help the fight against online fraud include:

  • Registering for, and using their financial institution’s online fraud prevention solutions, whenever prompted;
  • Being wary of offers that seem too good to be true – doing checks to make sure the business is legitimate. Do not click on the link provided and do not be tricked into divulging confidential data such as passwords;
  • 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; and
  • Providing card details only to secure and trusted websites – look for the locked padlock icon.

The good news is that Australians are not liable for any fraudulent transactions on their payment cards and will be reimbursed as long as they have taken due care.

Refer full media release by Australian Payments Network.

Sources:

Australian Payment Card Fraud 2018 Report
CNP Fraud Mitigation Framework

The release of Australian Payments Network’s (AusPayNet) card fraud data for 2017 shows card-not-present (CNP) fraud accounted for 85% of all fraud on Australian cards.

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.

As consumers spent more than ever on cards, the overall value of card transactions grew 5% to $748.1 billion. The value of fraudulent transactions grew in line with this total, increasing 5% to $561.4 million.

Card-not-present fraud now accounts for 84.8% of all fraud on Australian cards. Online card fraud increased from $418.1 million in 2016 to $476.3 million in 2017 – up 13.9%.

The rate of card fraud increased marginally from 74.8 cents to 75.0 cents for every $1,000 transacted.

“This is the trend, and the Australian industry has mobilised to ramp up the uptake of prevention measures,” says Dr Leila Fourie, AusPayNet CEO.

The total amount of fraud on proprietary debit cards dropped from $23.7 million in 2016 to $16.9 million – down 28.6%. This decrease can be attributed to a 35.5% drop in counterfeit / skimming fraud, down to 11.9 million.

Counterfeit / skimming fraud on all Australian cards fell 47.8% in 2017 to $30.9 million, the lowest level since 2006. This can be attributed to two factors: the transition to chip reading ATMs in Australia, and more countries upgrading to chip technology throughout 2017.

Online fraud now accounts for 85% of all fraud on Australian cards, totalling $476.3m in 2017 – up 13.9%. The percentage increase has slowed over the past three years, reflecting the progressive uptake of prevention measures.

In relation to this, AusPayNet announced the start of an industry consultation on a new framework to accelerate the fight against online card fraud.

Key elements of the CNP Fraud Mitigation Framework include:

  • Targets for card issuers to reduce CNP fraud across their card base
  • Merchants who record fraud above an agreed industry benchmark being required to use multi-factor authentication, except for exempt (low-risk) transactions
  • Boosting the use of tokenisation and compliance with card-security standards (PCI DSS)
  • Encouraging use of biometrics in authenticating CNP transactions“Through the framework, we are taking a leading-edge approach to tackling the global problem of increasing online card fraud,” said Dr Fourie.

The consultation period has commenced, with responses required by Friday 28 September 2018. For further details on the framework and consultation process, click here.

Some simple things people can do to help the fight against online fraud include:

  • Registering for, and using their financial institution’s online fraud prevention solutions, whenever prompted;
  • Being wary of offers that seem too good to be true – doing checks to make sure the business is legitimate. Do not click on the link provided and do not be tricked into divulging confidential data such as passwords;
  • 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; and
  • Providing card details only to secure and trusted websites – look for the locked padlock icon.

The good news is that Australians are not liable for any fraudulent transactions on their payment cards and will be reimbursed as long as they have taken due care.

Refer full media release by Australian Payments Network.

Sources:

Australian Payment Card Fraud 2018 Report
CNP Fraud Mitigation Framework