Daily BulletinHoliday Centre

The Conversation

  • Written by Steve Worthington, Adjunct Professor, Swinburne University of Technology
The new and more efficient payments system means new and more efficient payments fraud. Here's how to prepare

Most credit card fraud takes place online or over the phone. It’s not the cards that are stolen, but the details. The Australian Payments Network finds they are used to amass 85% of the money stolen using Australian credit cards, without the need to steal the cards themselves.

Usually, we are not liable for the money lost. It is reimbursed through our card provider if we have quickly reported the breach and taken due care.

The launch this February of the New Payments Platform owned by both the banks and Reserve Bank will make payments instant. It isn’t yet fully adopted, but when it is it’ll allow any financial institution to transfer money from any of its accounts to any other account near instantaneously.

Those transfers will be impossible to reverse.

While each institution will be able to impose limits on the upper value of transfers, the designers of the system expect them to be higher than credit card limits – more like the very high limits at present in place for transfers using BSB numbers.

It will makes them magnets for fraud, as they have become in Britain. The UK Faster Payments System was launched ten years ago. In 2010, the transaction limit was lifted to £100,000. In 2015, it it was lifted to £250,000.

Among the most lucrative frauds involves conveyancing, known as “Friday afternoon fraud”, as in the UK this is the day that many property sales are due for settlement and funds are transferred from payer to payee.

Fraudsters hack into emails between solicitors and their home-buying clients and then on the day the money is about to be moved, impersonate the solicitor and send the client an email saying the bank account details have changed and the payments should be made to a different account, created by the fraudster.

The Faster Payments system ensures the money is transferred immediately. The victim usually doesn’t know about it until the following week when they look for confirmation, and find they’ve sent the money to the wrong account.

In the UK, financial institutions have until now avoided paying compensation to the victims, because they themselves authorised the payments. However in August the UK Financial Ombudsman Service told the institutions to stop automatically blaming victims and take a fairer approach.

It said:

We often hear from banks that their customers have acted with ‘gross negligence’ and that this means that they are not liable for the money that their customers have lost. However gross negligence is more than just being careless or negligent. The evolution of criminal methods - in particular their sophisticated use of technology, means that gross negligence is an increasingly difficult case to make.

The UK Financial Conduct Authority is considering requiring financial institutions to handle payments fraud complaints in line with other complaints and to publish data about the extent of complaints.

Banks are introducing round-the-clock fraud detection help lines and fast response teams. Defrauded customers will in future only have to deal with their own bank and not the bank into which their funds have been paid.

In Australia, as in Britain, the best advice is to be extremely vigilant about checking emails that ask for payments. Often it will be worth ringing to check that the demands are real.

Extreme vigilance is easy to prescribe and hard to practice. But with payments under the new system impossible to reverse, and with our banks likely to be be initially reluctant to help out, as they were in the UK, we’re going to have to become more suspicious.

Authors: Steve Worthington, Adjunct Professor, Swinburne University of Technology

Read more http://theconversation.com/the-new-and-more-efficient-payments-system-means-new-and-more-efficient-payments-fraud-heres-how-to-prepare-102449


The Conversation


Scott Morrison interview with Ray Hadley

RAY HADLEY: Prime Minister, good morning.    PRIME MINISTER: G’day Ray.    HADLEY: Jeez you copped a hammering while I was away.   PRIME MINISTER: Goes with the job mate.    HADLEY: Well, yo...

Ray Hadley - avatar Ray Hadley

Immediate small business support for bushfire affected communities

In response to the devastating bushfires, the Morrison Government has today announced a comprehensive suite of measures to immediately support impacted small businesses.    This initial package ...

Scott Morrison - avatar Scott Morrison

Scott Morrison Press Conference - Australian Parliament House

Good afternoon. While we are facing more benign weather conditions in the short term, this morning, I received briefings from the Bureau of Meteorology, which set out that over the medium term out...

Scott Morrison - avatar Scott Morrison

Business News

How to Choose the Right Data Recovery Solution for your Business

In the modern business environment, data is one of the most important commodities. A typical B2C seller, for instance, offering home delivery service cannot deliver the product to the right addres...

News Company - avatar News Company

CrowdStrike Services Cyber Front Lines Report

New CrowdStrike Report Finds an Increase in Cyber Adversaries Turning to Business Disruption as Main Attack Objective CrowdStrike Services Cyber Front Lines Report offers observations gained from t...

Media Release - avatar Media Release

Which web design software is best for beginners

There are dozens of site-builders and software devoted to the art of creating a website. Some of these, like the one offered by Adobe, are more technically oriented and in many cases require a backg...

News Company - avatar News Company


The Family Travel Handbook from Lonely Planet

Everything you need to know to take unforgettable trips with your children   Full of practical advice, ideas and inspiration for every type of family, Lonely Planet's The Family Travel Handbook ...

Adam Bennett - avatar Adam Bennett

3 Ideas for a Family-Friendly Holiday to Bali

A family holiday is always an exciting time, but it can often come with its fair share of challenges, especially when trying to keep every member of the family happy. Thankfully, the beautiful islan...

News Company - avatar News Company

The Best Things to Do in Adelaide Hills

Adelaide Hills has long been a relaxing escape for the people of Adelaide and beyond. Its proximity to the capital makes it an accessible destination that feels like you’re miles away from the hustl...

News Company - avatar News Company