Card fraud in Australia even worse than feared

Seasoned security analysts know the card fraud trends, but the latest stats in Australia are surprisingly bad.

The Australian Payments Clearing Association (APCA) releases card fraud statistics every six months for the preceding 12m period. Lockstep monitors these figures, crunches them and plots the trend data.

Here’s the latest picture of Australian payment card fraud growth over the past six calendar years CY2006-11.

For the first time in many years, card fraud has grown in all categories at once. The ratio of Card Not Present fraud to all fraud remained steady at just under three quarters. Any up-turn in skimming and counterfeiting is surprising given the strong penetration of chip-and-PIN cards in Australia, although most ATMs here still use the stripe and remain vulnerable to carding. Still, CNP fraud remains the preferred MO of organised crime, and its cost grew by 61% from 2010 to 2011.

“Innovation” is a topical notion in Australian payments systems circles, but for the most part innovation is confined to back end systemic improvements to interbank settlements. Regulators take a light touch on the user side. The market is fostering innovative payments applications in mobile devices, but so far, security still proves to be too hard. APCA’s only position on security is to wait and see what happens when 3D Secure comes to Australia. Given that nothing has stood in its way, and CNP fraud is doubling every two years, the very absence of 3D Secure here should be worrying to the regulators.

For more information about Lockstep Technologies’ R&D in CNP payments security, see our recent blogs Killing two birds with one chip and CNP fraud is just online carding.