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Credit card spending falls as scams rise
With the pandemic forcing Aussies to switch to online payments, the number of scams has increased, but the number of card payments has fallen, new research has revealed.
Credit card spending falls as scams rise
With the pandemic forcing Aussies to switch to online payments, the number of scams has increased, but the number of card payments has fallen, new research has revealed.
Fresh figures released by the Australian Payment Network found card payments have declined for the first time, dropping 2.2 per cent in 2020.
While consumers are spending less, Australians still spent $801.7 billion on their cards in 2020.
However, not only did the data show falls in transactions, the Australian Payment Network also highlighted an increase in scams.
According to the figures, in 2020, Australians fell victim to $467.6 million in credit card scams, although it should be noted consumers would not have to foot the bill for these transactions.
The card fraud rate stands at 58.3¢ per $1,000 spent well below the 2018 level of 73¢ per $1,000.
AusPayNet CEO Andy White said the industry remained vigilant as e-commerce volumes grew strongly during 2020.
“Indications are that many of the spending patterns and trends established during COVID will remain once we emerge from the pandemic – that is likely to be the case with online shopping,” Mr White said.
The research showed card-not-present (CNP) fraud were the main targets for online transactions, increasing by 3.8 per cent to $418.9 million, alongside a surge in online spending driven by lockdowns and other restrictions during the pandemic.
CNP fraud occurs when valid card details are stolen and used to make purchases or other payments without the card being present at the point of sale, usually online.
“The good news is that the industrywide initiative put in place to mitigate CNP fraud two years ago has had a significant impact. Among other things, it encourages more stringent customer authentication by merchants and issuers, which can very quickly reduce fraud,” he said.
AusPayNet’s report also indicates that as measures to counter card fraud take effect, criminal groups are turning their attention to making money from scams.
The Australian Competition and Consumer Commission (ACCC) reports that Australians lost $851 million to scams in 2020, up 34 per cent on 2019.
“We know from experience that as one area of payments fraud becomes harder to perpetrate, criminal groups turn their attention to other areas, as is evident in the rise in scams,” Mr White said.
To prevent payments fraud, AusPayNet advises consumers to:
- Only provide card details on secure and trusted websites – look for the locked padlock icon and be wary of offers that look too good to be true
- Treat unsolicited emails and text messages from people they don’t know with suspicion – don’t click on the link provided and don’t be tricked into divulging confidential data such as passwords
- Regularly check statements and report any unusual transactions to their financial institution immediately
- Register for, and use, their financial institution’s online fraud prevention solutions, whenever prompted
- Enrol in push notifications to receive an alert each time a transaction is made on their account
- Do checks to make sure the online business they are paying is legitimate
- Always keep PC security software up to date and do full scans regularly.
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