One in nine Australians have been victims of personal fraud, with card fraud the most common type due to more people banking and shopping online because of COVID-19.
Card fraud is when criminals get a hold of 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 to 8.5 per cent in 2014-15.
The rise was driven by an increase in card fraud, which was the most common type of fraud, followed by scams.
About 1.4 million Australians experienced card fraud in 2020-21 — nearly 7 per cent of the adult population and a higher rate than in 2014-15.
And the main victims were people working from home during coronavirus lockdowns, with people aged between 35 to 54 the most affected.
Fraud involving bank and credit-card transactions reached $490 million over the 2020-21 financial year, according to the industry self-regulator, the Australian Payments Network, up 9.2 per cent from the previous year.
Total spending on cards increased to just over $847 billion over the 2021 financial year, amid a rise in online spending during COVID-19 lockdowns.
Card-not-present fraud, in which card details are stolen and used to make purchases, accounted for 90 per cent of fraud on Australian cards, while fraud involving lost and stolen cards dropped.
Financial institutions, credit-card companies, and merchants are liable to refund fraud losses on payments cards, provided consumers do not give their financial details to someone else.
'Multiple charges'
Retail worker Samantha Gray, 29, found out the hard way that scammers were using her bank debit card to watch streaming service Netflix.
"I noticed that I had two charges in the same month for Netflix and I thought that was very weird and not right," she said.
Ms Gray and her husband only picked up the fraud because they started to do a monthly spending audit.
They discovered the card had been illegally used for two years on Netflix and about $300 had been taken from the account.
But the bank only refunded part of the money.
"They said that they might be able to get some money back through their fraud department," Ms Gray said.
"They never guaranteed that I would get any back and it ended up being only a couple of months' worth.
"I think they probably could be refunding more. I know that with my experience, it certainly hasn't been that I get the full amount back, unfortunately."
And it was not the first time that Ms Gray was the victim of card fraud.
Several years earlier, criminals drained money from a different account and went on a spending spree.
"There were all these really weird charges that I definitely hadn't done."
"I called up the bank and they were like, 'Yep, your card has been compromised.'"
Card fraud
Former Queensland premier Anna Bligh is the head of the Australian Banking Association, which represents the nation's banks.
She told the ABC financial institutions were spending billions of dollars on technology to catch crooks.
"When we look at the picture of how many of our transactions are vulnerable to [card] fraud, it's actually quite a small number, $490 million, which sounds like a lot of money, but in the context of billions of billions of dollars' worth of transactions every year, I think it does tell us that our system is relatively safe," she said.
The Commonwealth Bank said earlier this month it would significantly increase its resources and technology to fight against scammers.
It has introduced new artificial intelligence technology to detect suspicious and unusual behaviour on its digital banking platforms and alert customers to potential scams.
Ms Bligh said she did not see a time when financial institutions would not refund losses for most card fraud.
"They want to keep their customers' money safe," Ms Bligh said.
"That's important to their reputation.
While financial institutions are liable for refunding fraudulent transactions, there are grey areas.
You probably will not get a refund if you click on a fake link for online banking, or if you deliberately or accidentally reveal your personal identification number (PIN) to someone else.
Ms Bligh said in the majority of cases of card fraud, customers would get a refund.
"So in most cases where the customer has not breached the terms and conditions of their card, so they haven't given their card to somebody else to use, they haven't given away their PIN number, in most cases where it has been a fraud [they will get a refund]," Ms Bligh said.
Morningstar banking analyst Nathan Zaia said card fraud refunds did not represent a huge amount of money for financial institutions, given the amount they made across their range of products.
"I think if you look in the context of the banks' earnings, it's not a major issue."
"Customers want to know that their money is safe with a bank."
Rising scams
As most victims of card fraud are reimbursed, and the fraud rate dropped in 2021 compared to the 2018 financial year, Gerard Brody from the Consumer Action Law Centre in Melbourne sees scams as the bigger threat, particularly for elderly and vulnerable people.
In a recent report, the Australian Competition and Consumer Commission (ACCC) said Australians lost more than $2 billion to scams last year, a record amount.
"At Consumer Action, we're seeing more and more complaints about scams," Mr Brody told the ABC.
"I think it's grown significantly during the pandemic period, where people are engaging in much more electronic commerce at home."
Mr Brody wants to see new UK-style protections 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.
Documents released by the corporate regulator, the Australian Securities and Investments Commission, earlier this year under Freedom of Information laws, revealed Australian financial institutions were fighting proposals for new obligations to prevent scams or reimburse customers, including a confirmation of payee service for electronic payments.
The banks argue that blanket refunds will further encourage scammers and customers might take less care in protecting their banking details.
Action is being taken by authorities against SMS scams, with mobile phone providers being forced to identify, block and trace text message scams or face fines.
Spotting the scammers
How to spot a scam |
Moneysmart.com.au |
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Unauthorised transactions |
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Credit-card scams |
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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 notice a mistake.
Samantha Gray has come up with a solution to fight the scammers, especially criminals who take small amounts of money from accounts in the hope the account holders will not notice.
She has set up a separate debit card for regular payments for services such as Netflix.
"So we put money in and when that money is gone, it's gone," she said.
Consumers should report scams to their financial institution, the police, and government agencies, including the ACCC, ASIC, and the Australian Tax Office.
