New figures reveal online credit card scams are increasing, with social media attributed partial blame, but the Australian Bankers Association insists fraud rates are still low.
According to new figures from the Australian Payments Clearing Association, the popularity of online shopping and eCommerce has led to a rise in “card not present fraud”, which is conducted online, over the phone or by mail.
This type of fraud has increased by 38% to account for $123 million. It represents 64% of all fraud on Australian cards in 2010.
Overall payments fraud in Australia – including by cheque, credit and debit cards – rose from 9.1 cents to 10.6 cents in every $1000 transacted, the figures reveal.
APCA chief executive Christopher Hamilton says the figures reflect the changing trends in card fraud.
“Every day, there are new online shoppers, new online retailers and more eCommerce,” he says.
“Online fraud increases partly because there is a lot more online commerce, and partly because new online consumers and retailers are still working out how to stay safe online.”
According to Gary Gill, national head of forensic at KPMG, social networks such as Facebook and Twitter are assisting organised crime syndicates in committing online fraud.
Social networking sites are particularly prone to phishing, which attempts to acquire sensitive information such as usernames, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication.
“It is increasingly a global issue. There is more of an organised criminal involvement now than there ever has been before,” Gill says.
The Australian Bankers Association admits that while total payment fraud rates have increased slightly, they are still at a low level considering the millions of transactions run through the system.
“Australia has a very safe and secure payments system. Banks understand that customers trust them to keep their savings safe,” ABA chief executive Steven Münchenberg said in a statement.
“Our banks have sophisticated computer systems, which identity suspicious transactions, and immediate action is taken to protect accounts. Usually, a bank will contact you and alert you to the suspected fraudulent activity.”
Meanwhile, security software firm AVG has issued a warning to businesses ahead of the tax return season, which starts on July 1.
AVG says taxpayers tend to fall prey to fraudulent emails, texts and phone calls purporting to be from the Australian Taxation Office at this time of year.
“In upcoming months, when the prospect of tax refunds is on everyone’s mind, be alert to emails and phone calls about money owed to you by the ATO or the need to recalculate your tax,” AVG security evangelist Lloyd Borrett says.
AVG offers the following tips to taxpayers who file their returns online:
- Always open your e-Tax filing directly from the ATO’s site – never click through from an email invitation.
- Always use a trusted WiFi or Ethernet connection. While you could file your taxes using your smartphone or laptop, don’t. File from home or the office where you have a firewall in place and internet security installed.
- Update your computer’s antivirus software. The first line of defence against these attacks is an up-to-date antivirus program on your computer or smartphone.
- Before you start compiling your documentation, run an update on both your PC and phone’s security software to ensure you’re fully protected, or download free protection from trusted sites.
- If you’re compiling information with your tax agent or family members from multiple locations, think twice before faxing sensitive materials. Email is far more secure. Also, ensure you delete those files from your email server once you’ve filed your return.
- If you receive suspect communication from “the ATO”, do not click on any links in an email or answer phone questions. Report unsolicited emails claiming to be from the tax office by forwarding the email to ReportEmailFraud@ato.gov.au.