A Preview On Potential Card Fraud
SYDNEY, Australia — In what may offer a preview of what is to come in the U.S., the Australian payments industry expects to reduce card fraud losses through a continuing migration to chip technology on payment cards, but fraud losses are rising during the transition period.
The move from pure magnetic stripe cards should lead to a sharp drop in card fraud when it is completed in 2013, according to the Australian Payments Clearing Association, a self-regulatory body of the country's payments industry. The improved security from chip technology would make Australia less attractive to fraudsters, said Chris Hamilton, the association's chief executive, in a Dec. 7 press release.
For now, however, fraud losses are rising, the group said. Australia's card fraud losses on all credit and debit cards climbed 9.6% during the 12 months that ended June 30, to $181 million from a year earlier. The number of instances of debit and credit card fraud jumped by 40.9% in the period, to 748,813. Fraud attempts using network-branded cards rose by 21%, to 34 incidents per 100,000 transactions. However, fraud on network-branded signature debit and credit cards dropped 2%, to 58.6 cents per $1,000 transacted, the association said.
It attributed the slight drop to the introduction of chip technology, which has resulted in a reduction in skimming-related fraud in which crooks capture information off of cards' magnetic stripes. The group said losses from fraudulent transactions on branded cards rose by 4.9%, to $155.5 million for the 12-month period. The number of fraudulent transactions surged by 37.1%, to 662,697.