Finance Your Budget Card fraud soars: don’t assume you’re covered

Card fraud soars: don’t assume you’re covered

online card fraud
Card-not-present fraud increased by $219.5 million (or 110 per cent) in five years. Photo: Getty
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Australians have been warned not to assume they will be reimbursed for online card fraud, as new figures showed these attacks more than doubled in the last five years.

Cyber criminals stole $417.6 million from Australians in 2016 without ever touching their physical cards, up 15 per cent from 2015 – and 110 per cent since 2011.

The technical name for this scam is ‘card not present fraud’. It’s where the thief makes illegal purchases using only a card’s number. Because its so covert, victims can be totally unaware their cards have been compromised.

Card-not-present fraud accounted for 78 per cent of all suspect card transactions in Australia last year, up from 68 per cent in 2011, the Australian Payments Network reported on Thursday.

The threat is increasingly relevant, as card payments have officially overtaken cash as Australia’s preferred payment method, and online shopping is growing in popularity.

But card holders may be complacent, as they assume the banks will repay anything stolen. This could be a costly assumption.

The Australian Payments Network report warned that consumers are only protected “as long as they have taken due care with their confidential data”.

This was confirmed by Samantha Mcleod, general manager of cyber security at ME bank, who said it was crucial to regularly check card statements and report anything suspicious immediately – as failing to do so can leave fraud victims out of pocket.

“If you don’t notify your bank within a reasonable time you may be liable for losses which occur as a result of your delay,” she told The New Daily.

“Your liability for losses resulting from unauthorised electronic transactions will be determined by the ePayments Code.”

The Australian Payments Network said fraudsters were most likely to perpetrate ‘card-not-present fraud’ by either stealing card details en masse through large-scale hack attacks on businesses, or through targeted identify theft aimed at individual card holders.

Other ways to protect yourself

In addition to paying close attention to card statements, ME bank, the Australian Payments Network and other experts also recommended:

  • Use protected payment services like PayPalMastercard MasterpassVisa Checkout or CommBank Checkout rather than giving your card details to a shopping website directly
  • If you’re shopping on a computer, keep the security software up-to-date and do a full scan often
  • If you’re shopping on a phone or tablet, make sure you are using the latest operating system
  • Thoroughly research a website before buying from it. For example, Google their company name with search words like “complaints”, “fraud”, “stolen” and “overcharged”
  • Don’t click on links in emails or SMS that claim to be from PayPal, your bank, or other business which may have your personal information. If you think that there is a chance it’s legitimate, go direct and enter the website details manually
  • Use second-factor verification if your credit card provider or bank allows it. After every purchase, an email or SMS will ask you to confirm the purchase
  • Use websites like ACCC Scamwatch to get tips on how to identify fake shopping sites

More protections on the way

The Australian Payments Network noted that Australian businesses will soon be required to tell their customers when they have suffered serious data hacks.

“Under the mandatory reporting scheme, organisations must also notify their customers so they can take remedial steps such as changing passwords or cancelling cards,” the report said.

Australian Information Commissioner Timothy Pilgrim said it would require many businesses to “notify individuals who are likely to experience serious harm as a result of a data breach involving their personal information — which can include, for example, financial information, contact details, credit information, and more”.

“The notification to individuals must include, among other information, recommendations about the steps an individual should take in response to the breach,” he told The New Daily.

The scheme will commence on February 22, 2018.

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