Bank and credit card fraud on the rise amid coronavirus lockdowns

One in nine Australians have fallen victim to personal fraud, with card fraud the most common type as more people banking and shopping online because of COVID-19.

Key points:

• Nearly 7 per cent of Australia’s adult population or 1.4 million people experienced card fraud in 2020-21
• Fraud on bank and credit card transactions rose 9.2 percent to $490 million during the 2020-21 financial year
• Australians lose more than $2 billion from fraud in 2021

Card fraud is when criminals obtain your banking or credit card details to illegally access your account and steal money.

The Australian Bureau of Statistics said 11 per cent of Australians, or more than 2 million people, were victims of personal fraud in 2020-21, compared with 8.5 per cent in 2014-15.

The increase was driven by an increase in card fraud, which was the most common type of fraud, followed by fraud.

Around 1.4 million Australians experienced card fraud in 2020-21 — nearly 7 per cent of the adult population and a rate higher than in 2014-15.

And the main victims are people working from home during the coronavirus lockdown, with people between the ages of 35 to 54 most affected.

People between the ages of 35 and 54 are more likely to fall victim to card fraud. (Provided: Australian Bureau of Statistics)

Fraud involving bank and credit card transactions totaled $490 million during the 2020-21 financial year, according to the industry’s independent regulator, the Australian Payments Network, up 9.2 percent from a year earlier.

Total spending on cards increased to more than $847 billion during the 2021 financial year, amid increased online spending during the COVID-19 lockdown.

Card-not-now fraud, in which card details are stolen and used to make purchases, accounts for 90 per cent of fraud on Australian cards, while fraud involving lost and stolen cards is down.

Financial institutions, credit card companies, and merchants are responsible for recovering fraudulent losses on payment cards, provided that consumers do not share their financial details with others.

‘Some fees’

Samantha Gray and her husband discover criminals taking small amounts of money each month.(ABC News: Daniel Irvine)

Retail worker Samantha Gray, 29, discovered the hard way that scammers used her bank debit card to watch streaming service Netflix.

“I noticed that I had two bills in the same month for Netflix and I thought that was very strange and untrue,” he said.

“So I checked it and it happened month after month. There were several bills every month.”

Ms Gray and her husband only picked up the scam because they started doing monthly expense audits.

They found the card had been used illegally for two years on Netflix and about $300 had been taken from the account.

But the bank only returned part of the money.

“They said they might be able to get the money back through their fraud department,” Gray said.

“They never guaranteed that I would get it back and in the end it was only a few months worth.

“I thought they might be able to refund more money. I know that with my experience I unfortunately didn’t get the full amount back, unfortunately.”

And it’s not the first time Ms Gray has fallen victim to card fraud.

Several years earlier, the criminals drained money from different accounts and went on a massive shopping spree.

“I checked the app and there’s almost nothing left in my account and I’m freaking out,” he said.

“There are all these really weird accusations that I definitely don’t commit.”

“I called the bank and they were like, ‘Yeah, your card has been compromised.'”

card fraud

Australian Banking Association chief executive Anna Bligh said card fraud remained a serious problem.(ABC News: John Gunn)

Former Queensland Prime Minister Anna Bligh is head of the Australian Banking Association, which represents the nation’s banks.

He told financial institutions ABC spends billions of dollars on technology to catch criminals.

“When we look at the picture of how many of our transactions are vulnerable to [card] the scam, it’s actually quite a small amount, $490 million, which sounds like a lot of money, but in the context of billions of dollars of transactions every year, I think it tells us that our systems are relatively secure,” he said.

Commonwealth Bank said earlier this month it would significantly increase its resources and technology to combat scammers.

It has introduced new artificial intelligence technology to detect suspicious and unusual behavior on its digital banking platform and alert customers to potential fraud.

Ms Bligh said she did not see a time when financial institutions would not refund losses for most card frauds.

“They want to keep their customers’ money safe,” says Bligh.

“It’s important to their reputation.

“They won’t keep customers if they can’t keep customers’ money safely.”

While financial institutions are responsible for returning fraudulent transactions, there are gray areas.

You may not get a refund if you click on a fake link for online banking, or if you intentionally or unintentionally disclose your personal identification number (PIN) to others.

Ms Bligh said in most cases of card fraud, customers will get a refund.

“So in most cases where customers don’t violate their card terms and conditions, so they don’t give their card to someone else to use, they don’t give out their PIN number, in most cases where it’s been fraudulent. [they will get a refund]said Blig.

Morningstar banking analyst Nathan Zaia said card fraud refunds do not represent a large amount of money for financial institutions, given the amount they generate across their range of products.

“I think if you look at it in the context of bank earnings, it’s not a big deal.”

“They see it as a cost of doing business, in essence, and part of the value proposition to customers,” he said.

“Customers want to know that their money is safe in the bank.”

Increased fraud

As most victims of card fraud are reimbursed, and fraud rates fall in 2021 compared to the 2018 financial year, Gerard Brody of the Consumer Action Law Center in Melbourne sees fraud as a greater threat, especially to the elderly and vulnerable people.

In a recent report, the Australian Competition and Consumer Commission (ACCC) said Australians lost more than $2 billion to fraud last year, a record amount.

“At Consumer Action, we’re seeing more and more complaints about fraud,” Brody told the ABC.

“I think it grew significantly during the pandemic period, where people are engaging in more e-commerce at home.”

Mr Brody would like to see new British-style safeguards put in place here, including a contingent reimbursement code that forces banks to offer compensation to people who are tricked into sending money to criminals.

“In the UK there have been reforms that require banks under these circumstances to refund innocent customers when they have been conned into making transactions that they did not actually authorize,” he said.

Documents released by the company’s regulator, the Australian Securities and Investments Commission, earlier this year under the Freedom of Inflation Act, reveal Australian financial institutions are championing proposals for new obligations to prevent fraud or reimburse customers, including confirmation of payee services for electronic payments. .

The bank argues that a full refund will encourage scammers and customers may be less careful about protecting their banking details.

Action is being taken by authorities against SMS fraud, with cell phone providers forced to identify, block and track text message scams or face fines.

Finding scammers

How to detect fraud?	Moneysmart.com.au
Invalid transaction	When someone transfers money from your account without your permission Payments to someone or a company you don’t know Cash withdrawals from places you’ve never been Transactions on the day you don’t use your account Payment is made twice
Credit card fraud	Unusual purchases with your credit card Check credit card statements regularly Report unusual transactions to the bank

The federal government’s Moneysmart website recommends that consumers check their bank and credit card statements regularly, and become familiar with the different types of transactions in their accounts, which makes it easier to spot errors.

Samantha Gray has come up with a solution to fight scammers, especially criminals who take small amounts of money from accounts in the hopes that the account holders won’t notice.

He has set up a separate debit card for regular payments for services like Netflix.

“So we put in the money and when it’s gone, it’s gone,” he said.

“So if a transaction bounces, we know that money has been taken which it shouldn’t have.”

Consumers must report fraud to their financial institutions, police and government agencies, including the ACCC, ASIC and the Australian Tax Office.

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