Fraud Statistics
2008 Calendar Year


Fraud Perpetrated on Australian Issued Payment Instruments

1 January 2008 - 31 December 2008
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 1,412 13,228,159 370,954 1,617,150 0.0004% 0.0008%
Proprietary Debit Cards 37,793 14,596,742 2,365,850 250,156 0.0016% 0.0058%
Scheme Credit, Debit and Charge Cards 412,568
146,718,060
1,710,418 243,131 0.0241% 0.0603%
Total 451,773 174,542,960 4,447,222 2,110,437 0.0102% 0.0083%
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

r = Figures have been revised.

Cheque Fraud Perpetrated in Australia

1 January 2008 - 31 December 2008
Category Actual Exposure Recoveries*
On-Us Fraud Number Value ($) Number Value ($) Value ($)
Valueless 8 66,820
233
15,139,888
0
Fraudulently Altered 466
3,915,540
833
12,538,550
516,203
Stolen Blank Cheque/Book 519
2,542,228
912
6,733,261
168,059
Originated Counterfeit Cheques 125
743,205
328
2,366,774
88,408
Non-originated Counterfeit Cheques 64 276,789 232 8,380,647 60,181
Breach of Mandate 116 4,768,975 203 3,854,807 562,877
On-Us Total 1,298 12,313,557 2,741 49,013,927 1,395,728
   
Deposit Fraud
Valueless 57 242,473 2,097 83,093,813 181,169
Valueless - Kite Flying 3 329,311 139 8,697,961 87,656
Third Party Conversion 54 342,818 82 1,774,126 88,027
Deposit Total 114 914,602 2,318 93,565,900 356,852
   
Total 1,412 13,228,159 5,059 142,579,827 1,752,580

* 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 2008 - 31 December 2008
Category Number Value ($)
Debit Card Fraud – PIN Used:
Lost/Stolen 9,138 3,478,215
Never Received 3,270 1,902,064
Counterfeit/Skimming 11,464 5,042,864
Other 3,154 1,416,912
PIN Used Total 27,026 11,840,055
 
Debit Card Fraud – PIN Not Used:
Lost/Stolen 2,804 622,384
Never Received 659 215,112
Counterfeit/Skimming 1,573 744,426
Other 5,731 1,174,765
PIN Not Used Total 10,767 2,756,687
 
Total Debit Card Fraud 37,793 14,596,742

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 2008 - 31 December 2008
Category In Australia Overseas Total
Number Value ($) Number Value ($) Number Value ($)
Lost/ Stolen 41,803 10,058,963 16,096 5,796,366 57,899 15,855,329
Never Received 11,339 3,197,682 1,085 291,426 12,424 3,489,108
Fraudulent Application 3,334 1,604,122 693 158,876 4,027 1,762,998
Counterfeit/ Skimming 34,665 21,431,620 41,710 28,728,932 76,375 50,160,552
Card Not Present (CNP) 80,643 26,732,131 175,548 46,027,508 256,191 72,759,639
Other 3,576 2,050,408 2,076 640,026 5,652 2,690,434
Total 175,360 65,074,926 237,208 81,643,134 412,568 146,718,060

Fraud Perpetrated in Australia on Cards issued Overseas

Category Number Value ($)
Lost/ Stolen 31,978 10,239,882
Never Received 2,532 706,474
Fraudulent Application 1,060 432,666
Counterfeit/ Skimming 201,213 78,282,089
Card Not Present (CNP) 91,663 28,800,938
Other 2,870 905,125
Total 331,316 119,367,174

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).