Fraud In Australia | Economic Crime

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Fraud and Economic Crime in Australia:

The definition of “fraud” is, “wrongful or criminal deception intended to result in financial or personal gain” or “a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.”

While Australia, as a country, boasts a great many qualities, most notably our impressive border control, quarantine processes, state police success rates, healthcare and education, we tend to get hit, pretty hard, from all angles when it comes to fraud. Businesses suffer at the hands of unqualified personal who’ve claimed to have what it takes for the job; retailers order stock that later turns out to be fake; relationships are exposed as a means for one partner to rip off the other; companies lose thousands of man hours to the hands of falsified injuries; individuals fork out tonnes of cash to ransomware (malicious computer programs that shut the machine down until a ransom is paid); some are tackled by liars over the phone, by email or post, claiming to be from trusted, Australian companies; and the list goes on.

With that, we thought to share a summary of the types of fraud that we Aussies run into most frequently, a brief description of the type of fraud, the financial effects that those types of fraud have on people, businesses and, where appropriate, Australian commerce, those most likely to be affected and a few notes on each. Let’s take a look:

Type of Fraud: Payment Fraud
Description: Where Debit card and Credit card details, Cheques and payment schemes are illegitimately utilized by unauthorized parties as a means to gain unlawful access to another’s funds.
Estimated Cost Per Annum: $400,000,000* +
Most Likely to Affect: People of all ages, nationalities and genders who use their cards to make purchases online without appropriate malware protection; those who carry their wallets and purses with little care in public and those who lose their cards and/or cheques but fail to inform their banks.
Notes: While over $150,000,000 is stolen by Australian residents or visitors to the country, the vast majority of payment fraud is carried out overseas, with more than $230,000,000 being stolen last year alone. * Figure taken as an estimate from apca.com.au (The Australian Payments Clearing Association)

Type of Fraud: Identity Fraud
Description: Where personal information about an individual or company is unlawfully used to gain illegal access to confidential information, bank accounts, insurance details and private holdings.
Estimated Cost Per Annum: $3,000,000,000 ($3 Billion) * +
Most Likely to Affect: Individuals who openly disclose personal information on social networking sites such as Facebook, LinkedIn and Google Plus; those who knowingly share information with unknown or malicious parties; and those who make online purchases from unsecure websites. Furthermore, when identity fraud is used as a means to gain unlawful employment (where a person is unqualified to perform a specific duty, but presents themselves as capable), the companies in question suffer greatly as the costs involved in the damages that these unqualified persons cause is more than significant.
Notes: Identity Fraud is most prevalent amongst older individuals (aged 50+) although it is common to find that people of all ages sometimes disclose too much information about their personal lives on social media. *Figure taken as an estimate from ABC.net.au

Type of Fraud: Insurance Fraud
Description: Where a person or company makes a false claim to gain a financial advantage.
Estimated Cost Per Annum: $2,000,000,000 ($2 Billion) * +
Most Likely to Affect: Insurance companies and Australian Businesses… and when it goes wrong, the businesses or individuals in question.
Notes: Worksafe Victoria issues over $50,000,000 in fines every year to people who are caught giving false information about injuries in relation to insurance claims at work. * While the statistics are much harder to measure than most other types of fraud, due to the diversity in the insurance sector, the $2 Billion figure is a rough estimate based on generalized false claims. We have to take into consideration that insurance fraud isn’t only about fake injuries; people also make false claims about lost or stolen bank cards, broken or misplaced mobile phones, stolen goods, motor accidents, other health issues and more.

Type of Fraud: Romance Fraud
Description: Where a person describes themselves in a certain way to attract a potential partner and leads them on to gain their trust before finding any number of ways to extort that person for financial gain.
Estimated Cost Per Annum: $22,000,000 ($22 Million) * +
Most Likely to Affect: People who use online dating services are the most vulnerable as the malicious parties are harder to identify. It is not uncommon, however, for one individual to meet another, in person, only to realize later on that their new partner is not who they originally claimed to be.
Notes: A background check is a quick and easy way to determine whether your potential partner is really who they say they are. *The figure listed above is an estimate taken from online dating fraud in particular, from scamwatch.gov.au, as the statistics available for physical encounters are much harder to quantify.

Let’s also take a quick look at a rundown of Scamwatch’s scam statistics for last year (2015). While not exactly “fraud,” scams are a grey area that still account for huge losses to individuals and companies throughout the country:

Type of scam: Buying or Selling
Description: Where illegitimate commerce is used to coerce unwitting persons into either selling their goods onto malicious parties in exchange for non-existent funds, or individuals pay for fake or non-existent goods.
Estimated Cost Per Annum: ~$8,000,000 

Type of scam: Attempts to Gain Personal Information
Description: The fist step to Identity Fraud, where scammers develop a wide range of methods to steal your personal information. These approaches are more technical than simply scouring the web by hand, and usually involve clever software that infects thousands of people’s computers at a given time.
Estimated Cost Per Annum: ~$3,000,000 

Type of scam: Fake Charities
Description: Where malicious parties prey on the kindness of others, calling their phones, sending emails or posting letters that ask for small donations to a given charity which doesn’t actually exist.
Estimated Cost Per Annum: ~$60,000

Type of scam: Investment and Job Opportunities
Description: Individuals are offered a “unique” way to make money fast from the comfort of their homes. These offers are usually in the form of online advertising, emails communications and occasionally by telephone. These scams include the use of Pyramid Schemes, Betting Schemes, fake investment opportunities and non-existent jobs.
Estimated Cost Per Annum: ~$34,000,000

Type of scam: Unexpected Money
Description: A person or company receives communication from an unknown party, sometimes acting as someone they know, who tells of the fact that they have come into large fortunes or run into small issues with making transactions, and so require assistance in return for a sizeable reward.
Estimated Cost Per Annum: ~$14,000,000

Type of scam: Unexpected Winnings
Description: Emails, phone calls or postal letters describe the fact that a person has won a large sum of money, a car, a trip abroad or other luxury item from a competition that was never entered. The scammers then ask that a small “release fee” be paid, yet the items are, in fact, never released.
Estimated Cost Per Annum: ~$1,500,000

Fraud, in general, is particularly difficult to quantify in terms of both its financial effects and the number of incidents that actually take place. The reason for this is simple: there are a great many agencies, added to the Police, who qualify fraud in different manners, thereby defining fraud in different ways. Further to this, while there are hundreds of thousands of reports made each year, there is believed to be a very high percentage of effected individuals who don’t report their cases, due to embarrassment, shame, laziness or even a lack of knowledge.

Regardless, from our four fraud categories alone, it’s easy to see why it’s so important that everyone take the appropriate measures to defend themselves against it, whether you’re a company or a representative of a business.

So, if you’d like to protect yourself or your company from any and all types of fraud, Precise Investigation can offer up a suit of counter measures that you can employ as once-off defenses or ongoing practices, each of which have their merits and allow for individuals and businesses alike to go about their day-to-day activities with little or no concern for the worst.

Call Precise Investigation today on 1300 856 011 for a discrete, professional private investigation service.

If you’d like to know more about our counter-fraud measures, please click here to learn more about our fraud investigation services.

No matter where in Australia you or your company are based, Precise Investigation can have an operative, or team thereof, backed by our dedicated support staff ready to assist. We have active agents operating throughout the country, regularly servicing the likes of Sydney, Melbourne, Perth, Adelaide, Hobart and Brisbane, but going further afield is never an issue. If you’re in danger of being defrauded, losing a loved one, sustaining damage to your reputation or having something important stolen from you, we are more than capable of helping you through the issue. Get in touch with us today and see what we can do for you.


Thank you and we look forward to hearing from you.

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