Bank and credit card fraud rise amid coronavirus lockdowns

Bank and credit card fraud rise amid coronavirus lockdowns

One in nine Australians has been the victim of personal fraud, with card fraud being the most common type as more people bank and shop online due to COVID-19.

Card fraud is when criminals get your bank 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 due to an increase in card fraud, which was the most common type of fraud, followed by fraud.

About 1.4 million Australians were affected by card fraud in 2020-21 – almost 7 per cent of the adult population and a higher rate than in 2014-15.

And the main victims have been people working from home during the coronavirus lockdown, with people aged between 35 and 54 being hardest hit.

People between the ages of 35 and 54 were more likely to be victims of card fraud. (Supplied: Australian Bureau of Statistics)

Fraud related to bank and credit card transactions amounted to US$490 million in the 2020-21 financial year, according to the industry’s self-regulatory body, the Australian Payments Network, a 9.2 percent increase from the previous year.

Total card spending grew to just over $847 billion in fiscal 2021 amid a surge in online spending during the COVID-19 lockdowns.

Card fraud, where card details are stolen and used to make purchases, accounted for 90 per cent of Australian card fraud, while lost and stolen card fraud declined.

Financial institutions, credit card companies and merchants are required to reimburse losses due to card payment fraud, provided consumers do not share their financial information with third parties.

“Multiple Fees”

A woman in a brown dress is sitting at a desk and working on a laptop
Samantha Gray and her husband discovered that criminals were stealing small amounts of money every month.(ABC News: Daniel Irvine)

Retail worker Samantha Gray, 29, found out the hard way scammers were using her debit card to watch streaming service Netflix.

“I noticed that I had two charges for Netflix in the same month and I found that very strange and not right,” she said.

Ms Gray and her husband only picked up the scam because they began conducting a monthly spending audit.

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

But the bank only refunded part of the money.

“They said maybe they could get some money back through their fraud department,” Ms Gray said.

“They never guaranteed I’d get anything back and it ended up being just a few months.

“I think they could probably refund more. I know that based on my experience, unfortunately I did not get the full amount back.”

And it wasn’t the first time Ms Gray had been the victim of card fraud.

A few years earlier, criminals withdrew money from another account and went on a shopping spree.

“There were all these really weird allegations that I definitely hadn’t made.”

“I called the bank and they said, ‘Yes, your card has been compromised.'”

card fraud

Woman wearing white t-shirt and black blazer sitting and smiling at camera.
According to Anna Bligh, chief executive of the Australian Banking Association, card fraud remains a serious problem.(ABC News: John Gunn)

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

She said ABC financial institutions are spending billions of dollars on technology to catch crooks.

“If we look at the picture how many of our transactions are vulnerable [card] Fraud, it’s actually a pretty 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 tells us that our system is relatively secure , “She said.

The Commonwealth Bank said earlier this month that it would significantly increase its resources and technology to fight fraudsters.

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

Ms Bligh said she does not see a time when financial institutions will not reimburse losses for most card fraud.

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

“It’s important for their reputation.

While financial institutions are liable for reimbursement for fraudulent transactions, there are gray areas.

You are unlikely to get a refund if you click on a fake online banking link or if you give your personal identification number (PIN) to someone else, intentionally or accidentally.

Ms Bligh said customers would receive a refund in most cases of card fraud.

“In most cases where the customer hasn’t breached their card’s terms and conditions, meaning they haven’t given their card to someone else for use, they haven’t shared their PIN number, in most cases where the Case was a scam [they will get a refund]’ said Mrs Bligh.

Morningstar banking analyst Nathan Zaia said card fraud refunds do not represent a large sum of money for financial institutions given the amount they are making from their range of products.

“I think if you look at the banks’ earnings, it’s not a big problem.”

“Customers want to know that their money is safe with a bank.”

Rising scams

With most card fraud victims being reimbursed and fraud rates falling in 2021 compared to FY2018, Melbourne’s Consumer Action Law Center’s Gerard Brody sees fraud as a greater threat, particularly to the elderly and vulnerable.

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,” Mr. Brody told ABC.

“I think it’s grown significantly during the pandemic period when people are doing a lot more e-commerce at home.”

Mr Brody would like to see new UK-style protections introduced here, including a conditional reimbursement code that will force banks to offer compensation to people who are tricked into sending money to criminals.

Documents released earlier this year by the company’s regulator, the Australian Securities and Investments Commission, under the No-Inflation Acts, revealed Australian financial institutions were opposing proposals for new obligations to prevent fraud or reimburse customers, including a payee service confirmation for electronic payments, fight.

Banks argue that lump-sum refunds further encourage scammers and customers may be less careful to protect their banking details.

Authorities are taking action against SMS scams, forcing mobile operators to identify, block and track SMS scams or face fines.

Recognize the scammers

How to spot a scam

Unauthorized Transactions

  • When someone transfers money from your account without permission
  • A payment to a person or company you do not know
  • A cash withdrawal from a place you haven’t been before
  • A transaction on a day when you did not use your account
  • A duplicate payment

credit card fraud

  • Unusual purchases on your credit card
  • Check credit card statements regularly
  • Report unusual transactions to the bank

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

Samantha Gray found a solution to fight the scammers, specifically criminals who withdraw small amounts of money from accounts hoping the account holders won’t notice.

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

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

Consumers should report fraud to their financial institution, the police and government agencies including the ACCC, ASIC and the Australian Inland Revenue.

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