Security Update – 20 April 2009

ATM skimming incidents have been increasing in Sydney, Melbourne and Brisbane since the end of 2008, with East European criminal syndicates allegedly responsible. Sydney has been the worst hit city with more than 40 ATMs being targeted in the Eastern Suburbs, City, Northern Beaches and Inner West during the past six months.

Four Romanians have been arrested in April in Sydney for ATM fraud while a further five have been arrested in Victoria. The increase in ATM fraud is part of a globally linked criminal network with Romanians recently being convicted in the US and New Zealand. John Lawler, Chief Executive of the Australian Crime Commission, warned that Eastern European criminal gangs pose a serious security threat in Australia. Likewise, Colin Dyson, commander of the New South Wales fraud squad, stated that Eastern Europeans and Russians present a ‘huge’ fraud threat as they are very active in all sorts of technology-enabled crime.

Police are currently investigating a wave of internet banking fraud thought to be perpetrated by Russian and East European crime syndicates while Eastern Europeans have also been blamed for an increase in burglary, shoplifting and pick-pocketing in Sydney.

International Operations Group - Analysis

The Australian Payments Clearing Association states that credit card fraud in Australia increased from $90 million in the financial year 2006/7 to $132 million in 2007/8. The number of cases involving skimmed or counterfeit cards almost doubled over the same time period. There has been increasing pressure for Australia’s banks to reduce card skimming opportunities by ensuring that the vast majority of consumer cards carry a chip and all terminals are chip capable. It has been estimated that it will take two to three years for this transition to occur.

ATM fraud is now increasingly likely to occur as card skimming devices have become smaller, more sophisticated and capable of holding more data. Due to the increasing risk of card skimming in Australia’s major cities, customers should exercise extra caution when using ATMs. Simple steps can be taken to reduce card skimming including the use of ATMs under video surveillance inside bank foyers/branches, covering the keypad while entering a PIN and not accepting ‘help’ from other people near to the ATM. Customers should also pay close attention to transactions listed in their monthly bank statements.

International Operations Group - Services

International Operations Group provides intelligence and security support for corporate and individual clients across the globe. Our team includes experienced specialists in fraud detection, fraud recovery and fraud risk management. Please email intel@interopsgroup.com for further information.

For more information on our fee-based intelligence updates or bespoke reporting, please email Rob Stevenson - rob@interopsgroup.com. Rob can also be telephoned on +61 [0] 420 244 909.