Home-based businesses warned over card fraud threat

Home-based businesses and other small online retailers have been issued a warning from the payments industry body, which has launched a new program to help combat online card fraud.

The Australian Payments Clearing Association has launched a new education program in partnership with the Australian Crime Commission and the Australian Federal Police.

The program, titled Get Smart About Card Fraud Online, aims to raise awareness among small businesses of the risks of online card fraud, and steps they can take to protect themselves from it.

The move comes after APCA released figures highlighting the link between online shopping and the rise in card-not-present fraud.

According to APCA, the number of fraudulent financial transactions rose from 834,684 in December 2010 to 1.15 million during the 12 months to December last year.

Alarmingly, more than 70% of fraud cases involved card-not-present transactions, in which the cardholder and retailer do not meet face to face, such as online or over the phone.

According to APCA chief executive Chris Hamilton, some merchants who are new to the online space don’t realise they can reduce the risk of falling victim to online card fraud.

“Just as retailers carry out simple security checks when taking card payments face-to-face, certain checks need to be done when taking payments online,” Hamilton says.

“Make sure you have a proper [payments] facility. If you’re not confident you do, maybe use a [third-party] gateway to look after the transaction.”

“It’s also about recognising which transactions are particularly risky and dealing with them sensibly. If an order seems too good to be true, it probably is.”

“If it’s a new customer you’ve never heard of before or there’s a sob story element to it, it’s worth a double check. You could say, ‘Fax me your driver’s licence’ or something like that.”

Get Smart About Fraud Online – which is available online – provides tips, information, advice and video case studies for small merchants doing business online.

It has been designed to allow time-poor businesspeople to work through it at their own pace.

Funded by Australia’s financial institutions, the program has been developed in conjunction with representatives from card schemes, merchants and the Australian Crime Commission.

“This initiative is the culmination of close industry collaboration with retailers and law enforcement to provide a safe online environment,” Hamilton says.

According to Russell Zimmerman, executive director of the Australian Retailers Association, small online merchants can’t afford to ignore the increase in online card fraud and the financial risk it entails.

“What makes [this program] stand apart from other fraud prevention materials out there is that it really gives Australian online retailers valuable knowledge on how criminals operate,” Zimmerman said in a statement.

“I highly recommend the program to any merchant selling online.”