Fraud Statistics
2007 Calendar Year


Fraud Perpetrated on Australian Issued Payment Instruments

1 January 2007 - 31 December 2007 (revised June 2010)
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 1,561 14,312,072 418,103 1,839,498 0.0004% 0.0008%
Proprietary Debit Cards 44,826 14,389,124 1,990,946 203,660 0.0023% 0.0071%
Scheme Credit, Debit and Charge Cards 337,911 113,245,136 1,758,296 250,626 0.0192% 0.0452%
Total 384,298 141,946,332 4,167,345 2,293,784 0.0092% 0.0062%
Note:

Data for total number of all transactions and total value of all transaction is sourced from data published in the RBA Bulletin. The data is sourced from Table C6 for Cheques, Table C4 and C5 for the Debit Card (ATM-POS) Category and Table C1 and C5 for Credit/Charge Cards Category.

As the Reserve Bank tables do not differentiate between scheme debit and proprietary debit transactions for the reporting period, the figures in tables C1, C4 and C5 have been adjusted according to data supplied by the Card Schemes to provide a true comparison with the fraud data collected by APCA.

r = Figures have been revised.

Cheque Fraud Perpetrated in Australia

1 January 2007 - 31 December 2007 (revised June 2010)
Category Actual Exposure Recoveries*
On-Us Fraud Number Value ($) Number Value ($) Value ($)
Fraudulently Altered 518 4,724,650 946 12,488,082 547,478
Stolen Blank Cheque/Book 710 3,029,897 1,238 9,707,386 421,718
Originated Counterfeit Cheques 112 724,308 284 3,277,603 105,053
Non-originated Counterfeit Cheques 57 435,991 262 6,254,970 140,491
Breach of Mandate 59 3,323,685 81 1,583,226 5,237,102
On-Us Total 1,456 12,238,531 2,811 33,311,267 6,451,842
   
Deposit Fraud
Valueless 35 1,315,388 1,624 40,340,806 974,055
Valueless - Kite Flying 20 65,660 176 508,184,980 24,703
Third Party Conversion 50 692,493 113 3,428,746 21,547
Deposit Total 105 2,073,541 1,913 551,954,532 1,020,305
   
Total 1,561 14,312,072 4,724 585,265,799 7,472,147

* 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 January 2007 - 31 December 2007 (revised June 2010)
Category Number Value ($)
Debit Card Fraud – PIN Used:
Lost/Stolen 8,308 2,819,993
Never Received 1,665 910,579
Counterfeit/Skimming 11,370 4,147,849
Other 5,168 1,978,323
PIN Used Total 26,511 9,856,744
 
Debit Card Fraud – PIN Not Used:
Lost/Stolen 6,065 1,398,342
Never Received 738 148,654
Counterfeit/Skimming 2,816 1,156,457
Other 8,696 1,828,927
PIN Not Used Total 18,315 4,532,380
 
Total Debit Card Fraud 44,826 14,389,124

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 January 2007 - 31 December 2007 (revised June 2010)
Category In Australia Overseas Total
Number Value ($) Number Value ($) Number Value ($)
Lost/ Stolen 46,976 12,029,793 14,617 5,545,864 61,593 17,575,657
Never Received 10,194 2,939,639 973 246,117 11,167 3,185,756
Fraudulent Application 5,550 2,824,338 637 254,860 6,187 3,079,198
Counterfeit/ Skimming 24,919 14,734,419 27,767 18,168,889 52,686 32,903,308
Card Not Present (CNP) 61,129 20,475,536 135,578 34,113,723 196,707 54,589,259
Other 7,791 1,551,081 1,780 360,878 9,571 1,911,959
Total 156,559 54,554,805 181,352 58,690,331 337,911 113,245,136

Fraud Perpetrated in Australia on Cards issued Overseas

Category Number Value ($)
Lost/ Stolen 26,935 9,380,811
Never Received 2,161 536,475
Fraudulent Application 1,058 381,454
Counterfeit/ Skimming 134,527 60,528,343
Card Not Present (CNP) 72,862 22,766,977
Other 2,250 712,058
Total 239,793 94,306,118

Note: Value of Credit/Charge Card Fraud has 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).