Victoria Police attributes the rise in deception cases to tap-and-go payments. Photo: Supplied
Security-conscious customers are unable to disable the tap-and-go function on their credit cards, despite mounting concerns from police and consumer groups about the risk of fraud.
Consumer advocates have raised questions over the lack of verification needed to use contactless payment methods, such as Visa payWave or MasterCard PayPass, and warned of an uphill battle facing victims of fraud seeking reimbursement from their bank.
Victoria Police statistics released on Wednesday show deception cases increased 45 per cent in the past 12 months to more than 35,700 offences. Police said the majority of the increase was linked to tap-and-go cards, which permit transactions up to $100 without a PIN or signature.
Deputy Commissioner Lucinda Nolan said police believed increases in car and home burglaries were linked to multiple low-value transactions on stolen credit cards.
''Quite often these offences are occurring overnight, so those cards are being used even before the victim has actually woken up,'' she said.
Police Minister Kim Wells said banks were not doing enough to prevent tap-and-go technology being abused, saying someone could use the cards to go on a spending spree.
Consumer Action Law Centre chief executive Gerard Brody said clients complained of being unable to opt out of the tap-and-go function on their cards, and that victims of fraud reported being told by their banks they were responsible for unauthorised transactions.
''We've heard that banks are saying to consumers that they are liable,'' he said. ''That's only the case if consumers don't contact their bank immediately upon becoming aware ... and further transactions occur.''
Katherine Lane, principal solicitor at the Consumer Credit Legal Centre in NSW, said it was ''appalling'' that card users could not opt out of the service. She said the true rate of fraud from these transactions was likely to be much higher as victims contacted their banks instead of police.
Ms Lane said consumers would end up paying more if fraud rates for tap-and-go cards continued to rise.
''This is a major worry going forward,'' she said. ''When your card is stolen, they can rack up an enormous amount. This mounting fraud means more costs, even if the lenders absorb it in the first instance.''
Australian Bankers' Association chief executive officer Steven Munchenberg said fraud rates on contactless transactions remained low and that cardholders were protected from wearing the cost if the fraud was proved.
''These cards use the same intelligent systems that look for stolen-card activity to identify possible fraud on customers' cards. This helps prevent fraud if the systems believe your card has been stolen,'' he said.
A MasterCard spokeswoman said the company was surprised by comments from Victoria Police and that it had not recorded an increase in fraud relating to tap-and-go technology.
A Visa spokeswoman said it was unlikely the company had seen an increase in fraud linked to the introduction of contactless payment technology, despite more than 10 million Visa PayWave cards having been issued.
Consumer group Choice urged cardholders to review their statements regularly.