23rd Aug 2018
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Online shopping has never been riskier, report shows
Author: Janelle Ward
online shopper

Online shopping with credit and debit cards has never been riskier with almost $500 million stolen in 2017, according to new figures released this week by the Australian Payments Network (AusPayNet), an industry group that collects payments statistics.

Fraud figures for Card-Not-Present (CNP) purchases rose from $418.1 million in 2016 to $476.3 million in 2017 – up 13.9 per cent. The figure has risen every year since 2012, when it was $183.1 million.

Industry experts attribute the increase to a boom in online shopping, with card details given for purchases stolen by fraudsters and re-used.

Giselle Lindley, a principal fraud consultant for Asia and Pacific with ACI Worldwide, said criminal activity had shifted away from counterfeit cards and skimming. “For those of us who have been in the fraud risk management business for long enough, it is no surprise at all that we are seeing significant growth in online card fraud.”

The increase in CNP fraud follows a well-known pattern, says bankinfosecurity.com.

Advances in technology, such as putting chips in cards, had made in-person fraud at ATMs and merchants vastly more difficult with skimming and counterfeit fraud registering just $30.9 million, down nearly 48 per cent from 2016.

But as a result, fraudsters had migrated to using card details stolen online.

“Attention is now focused squarely on online fraud,” said AusPayNet chief executive Leila Fourie.

She said AusPayNet was developing a framework to help merchants, payments companies and financial bodies reduce CNP fraud. For instance, if a merchant did not hit fraud targets, it could be required to go to greater lengths to authenticate payments, such as by sending customers a text message with a password needed to complete the payment, as often occurs with online banking.

The framework would also encourage greater use of "biometric" authentication, such as fingerprint scanners or facial or voice recognition technology.

However, Lockstep Technologies managing director Stephen Wilson told bankinfosecurity.com that moves to introduce stronger security measures while using cards online were being met with opposition. Merchants fear overly intrusive security steps will cause shoppers to abandon their end-of-purchase shopping carts, he said.

Ms Lindley said that there was “no silver bullet” to e-commerce fraud, with a balance between security and customer experience a delicate task

Total card fraud grew five per cent, to $561 million, and the overall rate of card fraud, at 7.5c in every $100 spent, was little changed.

What can you do to protect your accounts?

  • Secure all passwords to your computer and other mobile devices.
  • Make sure you have anti-virus and anti-spyware software installed, running, and receiving automatic updates. Avoid pirated software upgrades.
  • Use mobile applications with caution.
  • Malware can easily be inadvertently downloaded from seemingly legitimate shopping applications. Update all applications when notified, but only from trusted sources.
  • Limit online shopping to merchants that you know and trust.
  • Do not respond to pop-ups.
  • Be alert for potential charity donation scams and lottery scams.
  • Always sign out of your internet account.
  • Check your bank statements regularly.

Have you ever been a victim of online card fraud? Have you ever had your card blocked by your bank because they had noticed unusual activity?

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    COMMENTS

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    23rd Aug 2018
    6:19pm
    My bank always texts me a PIN number to be used for every on line purchase made
    Get the PIN number wrong and the card gets deactivated until they can reach me to verify
    Diom
    24th Aug 2018
    10:50am
    I never buy anything on line unless the seller accepts PayPal. They have my credit card details and no one else. If for any reason the product doesn't arrive then PayPal investigate it and refund my money if necessary. The has never happened to date but I feell safer buying this way on line.
    cupoftea
    24th Aug 2018
    6:07pm
    Diom you are right I go through PayPal and I got scammed once told them and before I knew it I hade my money back
    Sundays
    24th Aug 2018
    10:52am
    I use PayPal and have never had a problem.
    Knows-a-lot
    24th Aug 2018
    5:34pm
    The only trouble with PayPal is the added expense. Problematic if you're on a pension.
    rtrish
    24th Aug 2018
    11:07am
    Some years ago I used PayPal to purchase some CPAP equipment from America. It never arrived. I contacted the seller, he was always, "Oh, we're in the middle of moving factories, we'll definitely get it to you," etc. Did not receive it. Then the complaint time ran out so - I lost my money. About $68 which was not a fortune, but still, a chunk of change for a pensioner. Not so long ago, PayPal changed its policies about making complaints, so this would not happen any longer. Also, I am much more cautious about following things up - and more straightforward, not so polite any more!!
    casey
    24th Aug 2018
    12:00pm
    Ordered some goods once, what turned up was not what I ordered. Complained to Paypal and the seller refunded my money and said to keep the goods they sent. I always pay through paypal and use a travel money card, making sure there is just enough in it to cover my purchase cost.
    jackie
    24th Aug 2018
    1:26pm
    PayPal is the best and my bank notifies off all my transactions.
    Greg
    24th Aug 2018
    1:34pm
    Frauds are 1.5% of transactions by amount - no big deal.
    patti
    24th Aug 2018
    3:13pm
    I use PayPal. If I can't use it I don't buy. simple
    Sen.Cit.90
    25th Aug 2018
    10:35am
    My card was compromised once (a few years ago) presumably after giving details over the phone. My Bank notified me of the unusual withdrawals and refunded my losses. Ever since I never give my Debit Card details to anyone either phone or internet. As a few others have commented, I now use PayPal so far so good in many aspects. If companies do not have PayPal they do not get my business.
    DeepBlue
    27th Aug 2018
    11:31am
    It's clear that there are many scam sellers in the market and protecting ourselves from them is a challenge. But this is already largely addressed by information and services available on the internet. For example, when my wife plans to buy on-line, after selecting a product or service, her next step is to check the credibility of the seller by doing an internet search for reviews. If the reviews are acceptable, she buys. This helps protect us from all manner of issues, apart from only the payment process.

    However, like many previous articles linked to this topic of card misuse, it only mentions one side of the story. The other side is payment security for sellers – business and individuals.

    In my small business, I refuse to use card payment, because - in addition to my ethical concerns about the the proven criminality (funding wars, illegal drug operations and terrorism) of banks and banksters - there are the operational problems and considerable expense of accepting card payment. Too many card holders are dishonest, plus card issuers and their supporting banks expect too much profit. These two factors significantly drive up the price of goods and service for all the honest people.

    It's vital to remember that:

    1. The core business principal of retail banking is to get people into debt. The more debt they can get us to accept, the more money they can claim to have a legitimate right to take from us. Credit cards are a great money make for parasitic banksters.

    2. Non cash transactions are a means by which banks can make massive amounts of money from nothing and demand that we pay back with real money we earn. If we do not pay back, they claim the right to take our assets (house, car, business etc). This is a key technique banksters use to harvest the value of our effort and creativity. Reserve Deposit Ratios permit banksters to loan far more money than we have ever given them as our deposited funds. For example, a 10% Reserve Ratio means they can loan us $900,000 if they have our deposits of $100,000. Where does the $900K come from, it's just accounting entries they create on a ledger sheet. It's easy for them to loan this money as numbers on a ledger - your credit card statement or housing loan - and have this circulate in the system solely as numbers on ledgers, passed from one person or business to another in payments as ledger entries; never as cash. But when we pay back their counterfeit money, we need to use real money, the value of the wealth we create through our labour, creativity and enterprise. Imagine how much better off we'd all be if we can repay the banks with fake money we print on the photocopier or create as entries in our bank account; like they do when “loaning” us the money in the first instance. This scam is why banksters can have the biggest, fanciest buildings and highest salaries in town.

    3. When legitimate businesses do not get paid for the value of the work, services or products they provide, prices for the honest people must increase to cover these losses. If not, the staff working in these business cannot be paid, along with rents, phone bills, payments to suppliers etc. Banks - and especially their credit cards - are a major means by which businesses can be robbed, forcing up prices for everyone.

    4. When Ansett Airlines folded, hundreds of travel agents closed their doors and tens of thousands of their staff did not get paid and lost their jobs, because the banks - in combination with Mastercard and VISA - refused to pay those businesses their card collections at the end of that month and the next and the next; because they wanted the money to offset the claims for non-service coming from card holders who could no longer fly using the Ansett tickets they bought from their travel agent with that card. The banksters want to make a lot of money from providing credit card services, but they do not want to accept the financial risks that go with it. They want other people - eg employees, businesses that rent premises, or supply phone services etc to the travel agencies - to pay for those risks. In contrast, American Express and Diners Club took responsibility for the flight ticket purchase service they provided and honoured all their customers; buyers and sellers. They paid back money to their card holders but did not withhold future payments to the travel agents, their staff, suppliers etc.

    5. I've had a number of banks offer me a Merchant Account, but every time I looked through the fine print I see that the system is not balanced. I would take all the risks and they take nothing in the case of failed cardholder payment. They want a significant % of all payments and they want me to deposit a guarantee fund (some tens of thousands of $) on which they pay no interest and would return to me as the identical amount in say 20 years time, when inflation has halved the value of my money. They want that money to pay any charge-backs if I do not have enough transactions from which to take the money. A great scam if you can get it. If I accepted those terms I calculated I needed to put up my prices significantly – eg b y 10% - for all my clients; so the honest people again pay for the dishonest, along with the banksters' fees, loans, vacations, free lunches, amazing office views etc. I decided this is not fair for my honest clients.

    6. I do use PayPal for payments, and to receive payments. But there are other options that are better. PayPal only works fully in 15 countries. Getting a PayPal account to spend money is really easy, but that is because the up-front identity and security checking is limited. And because it has the same charge-back system as Mastercard and VISA, merchants can lose out due to dishonest buyers. Which means prices for everyone must be higher. Skrill is an alternative that isolates the source of money in a payers account from the payment, so a recipient is not subject to having the payment withdrawn because the payer lies about not receiving the goods or service, or the card does not actually pay. Skrill, therefore, has much stronger up-front identity and card verification, so the payee is more assured of receiving payment; which means lower prices for all buyers.

    7. I attended a briefing by a central banker about non-cash payment systems and how they want to reduce cash payments and increase cashless payments. He emphasised how they had taken steps to ensure system security and reliability amongst the banks and payment systems so card holders feel confident to spend using the system. After his briefing I talked with him and said he spent a long time on security for card holders but nothing about security of payment for merchants/sellers and that under the systems used by banks with Mastercard and VISA (and PayPal) there is very little security of payment for sellers. In fact the payment can be withdrawn by charge-back up to 6 months after the transaction has occurred and goods are delivered. I explained this is not payment security for merchants and it is a significant factor in prices increasing. The look on his face indicated he'd never thought about this side of the coin and hence the reason many businesses prefer cash – or alternate payment options - than using credit/debit cards.

    8. Direct payment - from buyers to sellers - for example using cash, helps prevent price increases because of dishonest card holders, banksters' big commissions to finance their extravagant lifestyle, and for the fact the banks and card issuers do not want to take financial responsibility for the inherent problems in their payment systems.

    9. We all dislike using TT for international payments to on-line services because the fee charged by the banks is high. And it's certain some of the money sent will not arrive. The banks are rarely honest about their actual total charges (for this or other services). Western Union and other money transfer services overcome this aspect of bankster dishonesty.

    10. As buyers, we all want convenient payment systems that protect us from the (occasional) cost of the risk of merchants not delivering, or goods damaged etc. But we are all paying significantly higher prices for goods and services bought this way when using bank or card based payment systems - eg: credit/debit cards, TT or PayPal. Because banksters are greedy and some buyers are dishonest.

    11. The supplier reviews we can access on the internet are a very effective means to get buyer protection without needing to utilise the (often abused) charge-back system provided by the banksters seriously flawed card based payment system. We can all save a lot of money and get lower priced goods and services, by focusing on these modern means of buyer protection, rather than antiquated and expensive bankster based systems.

    12. Cash and cryptocurrency payments are a far lower cost means of trading with each other. Banksters do not like these methods because they prevent bank skimming.

    The internet has given us an information revolution that provides us with an alternative to bankster based business validation. This system is called client reviews. The internet has also created the opportunity for peer-to-peer payment systems – such as cryptocurency – that eliminate the need for passing our money through the dishonest and sticky fingers of banksters.

    We do not need banksters anymore as payment middlemen. We can now get the same or better payment security for our on-line purchases without the high charges presently demanded by the banking system.

    PayPal recently dropped their commissions on received payments because they already see the low cost and absolute reliability of payment by cryptocurrency is a threat to their present business model. Some banks are embracing blockchain based systems to avoid being left behind. It's time for a money saving change in payment systems. The present bankster based systems - with all their parasitic costs - is too much for us to financially support.

    We are smart and we can sort out smarter and lower cost payment systems. We don't need banks, their cards or expenses anymore. The information and payment revolutions available via the internet allow us to trade and swap value directly with each other without sticky fingered banksters skimming the money value of our work, enterprise and creativity. It's time for them to get a real job that contributes to society, rather than suck the financial life out of enterprising and honest people and businesses.

    Time to get rid of the payment cards, along with the banksters that live off us via the excessive costs to sustain those systems. Choose payment systems and services that cost less, operate more ethically and help lower - not increase - the cost of our goods and services.
    Greg
    27th Aug 2018
    1:28pm
    So many "facts" that you have wrong - can't be bothered going through them all.

    Just keep in mind cash WILL BE a thing of the past eventually, and not too far in the distant future.


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