Fraud Statistics
2006 Financial Year


Fraud Perpetrated on Australian Issued Payment Instruments

1 July 2005 - 30 June 2006
Instrument No. of Fraud Transactions Value ($) of Fraud Transactions Total No. of all Transactions
(thousands)
Total Value ($) of all Transactions
($ million)
Fraud as % of Total No. of Transactions Fraud as % of total value ($) of Transactions
Cheque 2,942 40,706,011 466,942* 1,704,406* 0.0006% 0.0024%
Proprietary Debit Cards 29,357 14,471,065 1,760,193# 177,549# 0.0017% 0.0082%
Scheme Credit, Debit and Charge Cards 236,271 87,432,913 1,596,005# 224,777# 0.0148% 0.0389%
Total 268,570 142,609,989 3,823,140 2,106,732 0.0070% 0.0068%
Note:

* Reserve Bank of Australia. Data published in RBA Bulletin Table C5 for the number and value of cheques.

# Reserve Bank of Australia and Card Schemes. Data published in RBA Bulletin Table C1 for the number and value of credit and charge card transactions and Table C4 for the number and value of debit card (ATM-EFTPOS) transactions; and data supplied by the Card Schemes.

As the Reserve Bank tables do not differentiate between scheme debit and proprietary debit transactions, the figures in tables C1 and C4 have been adjusted according to data supplied by the Card Schemes to provide a true comparison with the fraud data collected by APCA.

Cheque Fraud Perpetrated in Australia

1 July 2005 - 30 June 2006
Category Actual Exposure Recoveries*
On-Us Fraud Number Value ($) Number Value ($) Value ($)
Fraudulently Altered 813 8,066,731 1,950 27,119,378 1,123,330
Stolen Blank Cheque/Book 1,071 5,676,870 1,926 13,424,098 157,658
Originated Counterfeit Cheques 426 3,713,887 891 62,676,803 355,626
Non-originated Counterfeit Cheques 213 2,318,846 453 6,510,520 576,973
Breach of Mandate 117 8,472,192 144 2,602,579 282,560
On-Us Total 2,640 28,248,526 5,364 112,333,378 2,496,147
   
Deposit Fraud
Valueless 117 1,946,266 2,073 42,521,296 298,396
Valueless - Kite Flying 11 171,620 290 18,376,972 31,393
Third Party Conversion 174 10,339,599 219 10,228,191 4,905,512
Deposit Total 302 12,457,485 2,582 71,126,459 5,235,301
   
Total 2,942 40,706,011 7,946 183,459,837 7,731,448

r = Figures have been revised.

* Data on the “number” of Recoveries is not collected.

“Actual” losses can relate to “Exposure” during an earlier period. This explains why, in some reporting periods, actual losses may exceed exposure.

Explanation of Cheque Fraud Categories
On-us Fraud

On-us cheque fraud includes cheques issued by Financial Institution X and deposited back into Financial Institution X. Categories for On-Us Fraud include:

Valueless : - Covers cheques drawn on an account where there appears to be suspicious circumstances or where it is thought that the Cheque is stolen or forged or in any other way is fraudulently issued and action is taken in terms of Rule 4.4 in Schedule 10.

Fraudulently Altered Cheques :

Payee Only - cheques that have been altered to show payee details other than those originally authorized by the drawer and where no other area of the cheque has been altered.

Amount Only - cheques that have been altered to show $-amount details other than those originally authorized by the drawer and where no other area of the cheque has been altered.

Both Payee AND Amount - Cheques that have been altered to show payee details AND $-amount details other than those originally authorized by the drawer and where no other area of the cheque has been altered.

Note: Fraudulently altered cheques do not include cheques with forged signatures. These are included in Stolen Blank Cheque/Book and Originated or Non-Originated Counterfeit Cheques.

Where alterations are made to the MICR line, items are included in the counterfeit category.

Stolen Blank Cheque/Book - this includes original stolen blank cheques that are written or marked in order to be passed off as if by the legitimate signatory. Includes forged makers mark.

Originated Counterfeit Cheques - originated counterfeit cheques are produced using the paper of the original cheque to create a new, unauthorized cheque. Techniques used in this process include washing, laser printing, scanning and desk-top publishing.

Non-originated Counterfeit Cheques - non-originated counterfeit cheques made on new paper to create a new, unauthorized cheque. Techniques used in this process include laser printing, photocopying, scanning and desk-top publishing. This category also includes items where the MICR line has been altered.

Breach of Mandate – this involves payment of cheques which do not follow the original instructions or arrangements set up. That is, the cheque may require two signatories but the financial institution, through error, allows only one signatory. Other examples include a cheque drawn by a designated authority such as Financial Officer or Accountant and used for fraudulent purposes.

Deposit Fraud

Valueless - Covers cheques deposited to an account knowing that these cheques should not be honoured on presentation by the drawee financial institution as they are valueless (lack of funds), counterfeit, reported stolen, have been fraudulently altered or are in breach of mandate (e.g. do not contain required number of signatures).

Note: This category excludes customer cheques dishonoured or returned for lack of funds where cheques were drawn in error, that is, there was no intent to defraud.

Valueless: Kite Flying - the activity of depositing valueless cheques and making withdrawals against those valueless cheques, between accounts owned by the same person. Also called round robin transactions.

Third Party Conversion - this category includes unaltered cheques which have been deposited to an account other than the payee. This arises where the financial institution has made insufficient enquiry or verification of the depositor regarding their title to the cheque. It also includes cheques where there are two payees but the financial institution has allowed one payee to deposit the amount into their personal account without authority from the other payee.

Proprietary Debit Card Fraud Perpetrated in Australia

1 July 2005 - 30 June 2006
Category Number Value ($)
Debit Card Fraud – PIN Used:
Lost/Stolen 7,024 3,588,404
Never Received 1,120 1,281,231
Counterfeit/Skimming 5,992 4,305,969
Other 3,639 2,167,829
PIN Used Total 17,775 11,343,433
 
Debit Card Fraud – PIN Not Used:
Lost/Stolen 5,918 1,373,262
Never Received 952 147,595
Counterfeit/Skimming 3,319 1,288,111
Other 1,393 318,664
PIN Not Used Total 11,582 3,127,632
 
Total Debit Card Fraud 29,357 14,471,065

Note: For fraudulent transactions initiated at ATMs, POS terminals and other devices, the above statistics incorporate all transactions where either "cheque" or "savings" was selected, regardless of the type of card used (that is debit card, 'combo card', scheme card etc).

Minor revisions have been made to the fraud figures.

Explanation of Proprietary Debit Cards Fraud Categories

Lost/Stolen - fraud resulting from the loss or theft of an existing card and a fraudulent transaction has taken place. Where the authorised cardholder is NOT in possession of the card and a fraudulent transaction has taken place this is deemed to be Lost/Stolen. Examples include, although not limited to, situations in which it is suspected a family member/friend is using the card and the card details have been compromised, active card left in ATM, customer disputed transactions and PIN given under duress. Card Never Received - fraud where a card has been intercepted (stolen) during delivery to the customer and used before it was received by the customer.

Counterfeit/Skimming - the use of altered or illegally reproduced cards including the replication/alteration of the magnetic stripe and/or changes to the details on the face of the card with intent to defraud. Skimming is a form of magnetic-stripe counterfeiting in which criminals are able to copy magnetic stripe track information (including Card Verification Value - CVV) from a valid card. Information is then encoded on a counterfeit or stolen card and then used fraudulently.

Other - fraud that cannot be categorized under any of the other fraud type categories. This includes identity takeover and false applications, fallback transactions/downtime transactions, merchant collusion in fallback, system malfunctions, bank error etc.

This category does NOT include MOTO transactions, internet transactions or spam phishing which are not acceptable transactions in CECS. Where claims are not investigated and are not confirmed to be fraudulent, they should not be included in the Debit Card fraud reporting (ie. goodwill). etc.

Scheme Credit, Debit and Charge Card Fraud
Perpetrated in Australia and Overseas on Australia-issued Cards

1 July 2005 - 30 June 2006
Category In Australia Overseas Total
Number Value ($) Number Value ($) Number Value ($)
Lost/ Stolen 42,203 9,794,146 15,780 4,527,804 57,983 14,321,950
Never Received 9,947 3,594,206 1,799 1,072,678 11,746 4,666,884
Fraudulent Application 9,559 5,736,808 1,657 2,033,099 11,216 7,769,907
Counterfeit/ Skimming 26,059 14,204,069 29,363 17,928,194 55,422 32,132,263
Card Not Present (CNP) 41,844 13,018,490 55,435 14,204,555 97,279 27,223,045
Other 1,840 936,181 785 382,683 2,625 1,318,864
Total 131,452 47,283,900 104,819 40,149,013 236,271 87,432,913

Fraud Perpetrated in Australia on Cards issued Overseas

Category Number Value ($)
Lost/ Stolen 21,600 7,991,806 r
Never Received 1,561 395,181
Fraudulent Application 1,039 164,383
Counterfeit/ Skimming 55,204 26,859,544
Card Not Present (CNP) 39,998 10,774,335
Other 2,272 679,426
Total 121,674 46,864,675

r = Fraud figures have been revised.

Explanation of Scheme Credit, Debit and Charge Cards Fraud Categories

Lost/Stolen Card - fraud resulting from the loss or theft of an existing card and a transaction has taken place without the cardholder’s consent or authority.

Card Never Received - fraud where a card has been intercepted (stolen) during delivery to the customer and used before it was received by the customer.

Fraudulent Application - fraudulent applications are applications for card accounts using a fictitious identity, using someone else’s identity or providing false information during the application process.

Counterfeit/Skimming - the use of altered or illegally reproduced cards including the replication/alteration of the magnetic stripe and changes to the details on the face of the card with intent to defraud. Skimming is a form of magnetic stripe counterfeiting in which criminals are able to copy magnetic stripe track information (including Card Verification Value - CVV) from a valid card. Information is then encoded on a counterfeit or stolen card and used fraudulently.

Card Not Present (CNP) - the use of account information including pseudo account information without the physical card being involved, via the phone, mail, Internet etc. without the authority of the cardholder. This category also includes fraud where a card should normally be present (eg: in a retail transaction) but a merchant has chosen to accept the transaction based on a card number only and it turns out to be a fraudulent transaction.

Other - fraud that cannot be categorised under any of the other Fraud Type categories. For example fraud using imprints of cards at merchants, or use of an existing account without the authority of the cardholder by a person who gains access to and use of the account through an unauthorized means, such as a fraudulent change of address or request for re-issuance of cards (but not lost or stolen cards).