Tap + Go Consumer Electronics Theft Growing, Slammed by Magistrate + Police
According to Euromonitor International’s Global Retail Theft Barometer for 2012-13 consumer electronics was among the most stolen of retail goods.
MasterCard and Visa are downplaying claims that tap-and-go debit card technology is a boon for thieves.
Richard Murray the CEO of JB Hi Fi claims that the risk to the retailer is mitigated by the fact that the credit card Companies are taking responsibility for the illegal use of a credit card in their stores.
Last week Perth Magistrate Michael Wheeler said that the new tap and pay technology were all too easy to use unlawfully.
He was sentencing a woman who had used someone else’s PayPass debit card more than 30 times before being caught by local Police.
Mr Wheeler noted fraudsters could even get away with using a card bearing the name of someone of a different gender because they were not checked.
A major issue for consumers according to WA police is that retailers are moving to tap and pay and on many occasions are not giving card users the opportunity to put a transaction through via a debit, savings or cheque transaction.
Police said that the tap and pay credit cards can only be used for transactions up to $100 – but fraudsters can use them dozens of times before the owner realises his/hers has gone missing. Banks are liable to pay back any pilfered money.
“PayPass, what a dumb stupid pathetic scheme to save five seconds. It’s my card. I don’t want that option,” one post read. “Why don’t we have a choice whether to have PayPass?” another read.
A MasterCard spokeswoman said consumers did have choice: they could use the tap-and-go functionality or swipe the card and enter their PIN as they had always done.
She said most consumer complaints were resolved quickly as they involved small sums of money.
Perth Now reports that one consumer wrote recently “Yes, it’s true you will hopefully get your stolen money back but it takes a minimum of eight weeks and if they (banks) decide against giving your money back, you will be charged an additional $25 for each purchase you have disputed,” one of the WA Police Facebook page posts read.
“All this with your own savings, mind you, not a credit card.” The MasterCard spokeswoman said the vast majority of lost, stolen or `never arrived’ cards used by fraudsters did not involve contactless transactions.
“Lost or stolen cards can be used online or for telephone transactions as the fraudsters have access to the CVV2 code on the back of the card,” she said.
The spokeswoman said fraud using contactless means accounted for less than two per cent of all total card fraud.
“This is in the context of massive growth in the contactless category,” she said.
“Contactless transactions have grown by 350 per cent year-on-year from calendar 2012 to calendar 2013.” In May, however, Victoria Police Chief Commissioner Ken Lay said tap-and-go credit cards were one of the main factors behind a five per cent surge in the state’s crime rates.
Overall theft from consumer electronics retailers is rising.
Last year customer theft accounted for 45% of the losses, costing $1.086 billion to the retail industry. Employee theft made up 27%, $652 million, of the total loss. Supplier fraud accounted for 7% of the loss, at $169 million, while in-house administrative errors and non-crime losses accounted for 21% at $507 million.
Other categories targeted by thieves include consumer electronic health products, electronic games and mobile device accessories.
Across 16 countries surveyed, it was found around $109 billion was lost to shoplifting and employee crimes or administrative errors in 2012.
The Euromonitor International’s Global Retail Theft Barometer report found that the theft levels mean Australian households are paying the second highest ‘honesty tax’ of the countries in the survey.
This ‘honesty tax’ was calculated by the price increases made by retailers to compensate for retail loss, resulting in $290 for each Australian household. The amount was slightly higher than the United States at $296, and above Belgium at $253 per household.
Checkpoint Systems Australia funded the report. Its managing director for Australia and New Zealand, Mark Gentle, said this year internal security had improved, but customer theft was still an issue.