Online credit card fraud is on the rise and Australians are warned to be vigilant when making transactions. In the past year Australians have embraced the convenience of card payments, reportedly making over 8.1 billion transactions in a year. However, along with this comes an increase in card-related fraud.
Cold, hard facts
A recent study conducted by the Australian Payments Network (APN) showed that fraud on Australian cards increased from $461 million to $534 million. Furthermore, the rate of fraud on all Australian cards and cheques increased from 24.5 cents per $1,000 in 2015 to 28.9 cents per $1,000 in 2016.
“As chip technology continues to provide strong protection against counterfeit cards, fraud is increasingly migrating online,” noted APN in a statement.
In light of this it is evident Australians need to be weary of falling prey to online fraudsters.
Be aware of fraud trends
There are various ways in which credit card holders can become victims of fraud however, according to officials, certain methods have become more prevalent than others.
Lost or stolen card
Queensland Police recently noted a common type of credit card fraud occurs when an offender uses a credit card that was unlawfully obtained to make a purchase. In many instances, the credit card is lost or stolen however, the number of the card could also be obtained in the following ways:
- From a credit card generator site on the Internet
- From an unscrupulous retail merchant who retains credit card numbers processed through a retail outlet and uses them unlawfully
- From offenders who utilise skimming machines to record multiple credit card numbers via retail outlets
- From sourcing discarded copies of credit card vouchers via waste receptacles
- From hacking into computers where credit card numbers are stored
The Australian Federal Bureau (AFB) stated that online crime is becoming increasingly centred on identity theft.
“This is part of identity fraud and specifically refers to the theft and use of personal identifying information of an actual person, as opposed to the use of a fictitious identity,” noted the AFB.
“This can include the theft and use of identifying personal information of persons either living or dead.”
Card Not Present (CNP)
According to the APN, this type of fraud makes use of account information, including pseudo account information, without the physical card being involved.
This is done without the authority of the cardholder and can be done via phone, mail and internet. In other instances, this type of fraud can be conducted when a merchant accepts transactions based on a card number only, which turns out to be a fraudulent transaction.
The APN also warned credit card holders to be weary of skimming, which is “a form of magnetic stripe counterfeiting in which criminals are able to copy magnetic stripe track information (including Card Verification Value - CVV) from a valid card. Information is then encoded on a counterfeit or stolen card and used fraudulently.”
There are various ways card holders can safeguard themselves from falling prey to online fraud. Scamwatch, an organization that provides information to consumers and small businesses about how to recognise, avoid and report scams, suggested the following tips for Australians to consider:
- Do not open suspicious texts or emails – delete them.
- Verify the identity of the contact by calling the relevant organisation directly – find them through an independent source such as a phone book or online search. Do not use the contact details provided in the message sent to you.
- Never send money or give credit card, online account details or copies of personal documents to anyone you don’t know or trust and never by email.
- Choose passwords that would be difficult for others to guess, and update them regularly. Don't use the same password for every account, and don't share them with anyone.
- Secure your networks and devices with anti-virus software and a good firewall. Avoid using public computers or Wi-Fi hotspots to access or provide personal information.
- Be very careful about how much personal information you share on social network sites. Scammers can use your information and pictures to create a fake identity or to target you with a scam.
- Put a lock on your mailbox and shred or destroy any documents containing personal information before disposing of them.