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Small businesses urged to report online credit card fraud

Media Release

24 February 2005

Media release from Minister for Justice and Customs, Senator the Hon Chris Ellison

A national survey of small businesses has revealed online credit card fraud is heavily under-reported, the Minister for Justice and Customs, Senator Chris Ellison said today.

Releasing the latest report from the Australian Institute of Criminology (AIC), Online credit card fraud against small businesses, Senator Ellison said the study reveals that less than one third of incidents uncovered by the survey were reported to police.

"In contrast to over-the-counter credit card transactions, where businesses are generally not liable for fraudulent purchases, online traders are responsible for recouping losses associated with online credit card fraud," Senator Ellison said.

Senator Ellison urged small businesses to report the incident to police to help the Government crackdown on this crime.

"Reporting of online credit card fraud assists the police in identifying patterns of fraud being perpetrated against particular traders. This provides important information to the police in targeting their efforts," he said.

The national survey of small businesses found:

  • one third of online traders have been a victim of online fraud;
  • over half of those businesses hit became repeat targets of fraudsters; and,
  • average losses ranged from $100 to $3,500.

"As business transactions increasingly move online we want to ensure our law enforcement agencies have all the intelligence and information available to help protect Australian small businesses and consumers," Senator Ellison said.

In September last year, the Federal government introduced tough new laws to combat credit card skimming and Internet banking fraud with penalties of up to five years imprisonment.

Senator Ellison commended the Australian Institute of Criminology for the report and thanked the Australian Crime Commission and the Australian High Tech Crime Centre for their ongoing close work with the finance sector to combat these crimes.

Practical steps for small businesses to prevent e-crime occurring include:

  • securing your business computer or network;
  • preventing business information from being stolen;
  • setting minimum identification requirements for credit card orders received over the internet;
  • screening orders coming in over the internet to ensure that they are legitimate;
  • ensuring that you authorise transactions with your financial institution;
  • maintaining a list or database of lost or stolen credit cards and fraudulent orders;
  • allowing only trusted staff members to have access to computer files containing customer information;
  • being wary of unsolicited emails, and
  • wiping the hard drive before you dispose of your computer.

Manual screening of online customers:

  • phoning or emailing the customer to confirm the order;
  • asking for the credit card security number;
  • checking the address provided against the name of the cardholder;
  • maintaining a database of good customers who have previously ordered from you;
  • maintaining a database of bad customers who have defrauded you in the past;
  • asking for more identification details if you suspect that the order may be fraudulent, and
  • rejecting an order if it has one or more factors that lead you to suspect that it is fraudulent.

More information is available in E-Crime - A Crime Prevention Kit for Small Business at: