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Australia's Finance Regulator Revises Net Fraud Rules

Financial industry regulator the Australia Securities and Investments Commission (ASIC) has limited losses suffered by credit card holders in the second draft of its Electronic Funds Transfer (EFT) Code of Practice.

The draft, released Friday, expands the code to cover all forms of EFT, including telephone, smart cards and Internet transactions, used by customers for banking. Previously the code had only canvassed Asynchronous Transfer Mode (ATM) and Electronic Funds Transfer at Point of Sale (EFTPOS).

According to ASIC, this new approach within the code aims to be "technologically neutral with the same protections for users applying regardless of what technology they use to transfer funds."

Under ASIC's revised rules, consumers will not be blamed for losses resulting from fraud, but only when a Personal Identification Number (PIN) is used.

In credit card fraud situations that require only a false signature, consumers face losing up to AUS$150 (US$99).

The Code also limits customers' liability for losses to AUS$50 (US$33), as long as they have not disclosed their PIN.

ASIC has also sought to protect customers with explicit requirements for credit card providers to set a daily transaction limit, in a move to restrict large scale losses through fraud or hacking.

ASIC has posted a copy of the draft code on its Web site, and will accept submissions for amendments until March 3.