4528.0 - Personal Fraud, 2007 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/06/2008   
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Contents >> Chapter 1 >> Summary of Findings

SUMMARY OF FINDINGS


INTRODUCTION

This chapter presents a summary of findings from the Australian Bureau of Statistics (ABS) 2007 Personal Fraud Survey conducted during July to December 2007.


PERSONAL FRAUD IN AUSTRALIA

Personal fraud has been recognised as a crime type that is a growing threat to the community, as a result of the rapid expansion and availability of internet technology and the increase in electronic storage, transmission and sharing of data. Due to the wide range of commercial and government agencies with a remit to respond to various types of personal frauds and scams, it can be difficult to understand the prevalence of such incidents in the general community using available recorded crime statistics or other administrative data sources. This survey provides a national benchmark measure of the extent to which Australians were exposed to a range of personal frauds, whether they became a victim of a selected range of personal frauds and whether they incurred any financial loss as a result of being victimised.


MEASURING PERSONAL FRAUD

Fraud is, by its very nature, a crime aimed at gaining advantage over a victim by means of deception, whether financial or otherwise. As these fraudulent activities can manifest in a range of guises, such incidents can be difficult to identify. This makes measuring the occurrence of these incidents within the community a complex undertaking. The accuracy of statistics can be affected by factors such as the ability of people to recall incidents that have occurred in the past. The longer the elapsed time period, the less likely it is that an incident will be recalled accurately. Given this issue, those surveyed during the survey reference period (July to December 2007) were asked to recall incidents that occurred only in the 12 months prior to the date of their interview.

Other factors affecting accuracy include the ability of people to make judgements about whether some of their experiences have been legitimate or fraudulent; and a willingness to reveal if they have been deceived, or have incurred significant financial loss. In addition, victimisation surveys require that the respondent has an awareness of an incident to be able to report it to an interviewer. As personal frauds are aimed to deceive their victims, they may never discover frauds that have been perpetrated against them, or may discover such events long after they have taken place. In such instances, their experiences would not be counted in the Personal Fraud Survey.


SCOPE

For the purposes of this survey, the estimates represent personal fraud experienced by people in Australia aged 15 years and over. The survey excluded frauds experienced by a business, corporation or agency.


CONCEPTS

The survey measured three key elements of personal fraud:

  • people's exposure to a range of selected scams;
  • whether a person was a victim of either identity fraud or a range of selected scams. Identity fraud is further disaggregated into credit or bank card fraud, and identity theft. Selected scams included: lotteries, pyramid schemes, phishing and related scams, financial advice, chain letters, advance fee fraud and other scams; and
  • any financial losses incurred by victims of personal fraud during the reference period.

Detailed demographic characteristics about victims, as well as characteristics of the most recent incident for each type of personal fraud were also collected. Characteristics included: the method of fraud delivery, whether the fraud was reported, the agency the fraud was reported to, how much time the victim invested in dealing with the incident, and whether the victim's behaviour changed as a result of the incident.


Scam

A scam is a fraudulent invitation, request, notification or offer, designed to obtain someone's personal information or money or otherwise obtain a financial benefit by deceptive means.


Identity Fraud

Identity fraud involves the theft of a pre-existing identity without a person's consent, where the person's name, date of birth, address or other personal details are used to engage in fraudulent activities, such as conducting business, opening accounts, taking out loans or avoiding criminal liability.


Exposure to scams

For the purposes of this survey, a person was deemed to have been exposed to a scam if they received an unsolicited invitation, request, notification or offer, and viewed or read the unsolicited material.

Exposure does not apply to incidents of identity fraud.


Victimisation
  • Scams - A person was defined as a victim of a scam in the Personal Fraud Survey if they responded to a scam invitation, request, notification or offer by way of supplying personal information, money or both, or if they sought more information from the offender.
  • Identity fraud - A person was defined as a victim of identity fraud if they had their credit or bank card, other personal details or documents, such as driver’s licence, tax file number or passport, used by another person for unauthorised gain. This included instances where business transactions were conducted or accounts opened in the victim’s name without permission, or any other uses of their identity without permission. Persons who became aware of an occurrence of identity fraud against them were considered to be a victim.


Victim counts

A person could have been a victim of one or more selected personal fraud types; where this was the case they were counted in each personal fraud type. For example a person may have been a victim of both an advance fee scam and a lottery scam. This person would be counted in both categories. See Explanatory Notes, paragraph 18 for further information.


Most recent incident

Detailed characteristics (such as method of fraud, reporting of incidents, financial loss, time lost or behaviour changes) of each type of fraud were collected only for the most recent incident of that fraud type. See Explanatory Notes, paragraph 19 for further information.


Types of personal frauds

The following selected personal frauds were included as part of the survey. More detailed information about these frauds can be found in the Glossary.
  • Credit or bank card - Involves the unauthorised use of a credit or bank card.
  • Identity theft - Involves the theft and fraudulent use of personal details or documents such as a driver's licence, tax file number or passport to conduct unauthorised transactions including conducting business or opening accounts in another person's name or otherwise using a person's identity without permission.
  • Lottery - a scam where a person is advised that they have won a lottery they have not entered. They are then asked to provide personal information to prove their identity and/or send a fee or bank account details in order to collect the prize.
  • Pyramid scheme - a multi-level scam where people pay a fee to join a scheme. Subsequent earnings and promotions depend upon recruiting other people into the operations.
  • Phishing and related scams - Scams which involve a fraudulent request, purporting to be from a business or bank, to confirm a person's bank account or personal details using a range of methods such as by email, landline, mobile telephone, post or in person. Phishing is an attempt to acquire personal information, such as an account number, password, credit card details, etc., usually via email or instant messaging, in which the email purports to be from a legitimate or trustworthy business or bank and directs a person to a hoax website to verify their account details. Vishing is a variant on phishing where the method used is the telephone either using Voice over IP (VoIP) or a 'live person' to gain access to a person's bank account/personal details, rather than the email/internet.
  • Financial advice - unsolicited fraudulent financial advice or offer such as share promotion, investment seminar or telemarketing, real estate scam, etc.
  • Chain letter - an invitation to send a specified amount of money or goods to a person named at the top of a list. The target is then asked to remove the name of the sender at the top of the list and replace their own at the bottom of the list before sending the list on to others to follow the same procedures. The target at the bottom of the list moves up a rung with the expectation that they will eventually reach the top and reap rewards by converting others to keep the chain moving and supplying money.
  • Advance fee fraud - an unsolicited request to transfer funds into a person's bank account. This commonly involves an elaborate or dramatic 'story' in which a large sum of money needs to be transferred, and the respondent's account is needed to move the money. The fraudulent request usually promises that a commission or fee will be paid for the assistance provided, but instead funds are withdrawn illegally from the respondent's account.


EXPERIENCE OF PERSONAL FRAUDS

The following chart shows experience of selected personal frauds for Australians aged 15 years or more in the 12 months prior to the survey.

Diagram: Experience of selected personal frauds


SNAPSHOT OF VICTIMISATION AND FINANCIAL LOSSES INCURRED THROUGH PERSONAL FRAUDS

A total of 806,000 Australians aged 15 years and over were victims of at least one incident of personal fraud in the 12 months prior to interview. This equated to a victimisation rate for personal fraud of 5% of the population aged 15 years and over.

There were 453,100 victims who lost money in the 12 months prior to interview, incurring a combined financial loss of almost one billion dollars ($977 million). Of the victims who lost money to personal frauds, the median financial loss was $450 per person, while the mean loss was $2,156 per person.


SNAPSHOT OF IDENTITY FRAUDS

In the twelve months prior to the survey, identity fraud accounted for 3% or nearly half a million (499,500) victims in Australia. Just over half (54%) of these victims were male, while 46% were female.

Of the 499,500 victims of identity fraud, the majority (383,300 or 77%) were a victim of credit or bank card fraud. This equated to a victimisation rate of 2.4%. These victims experienced at least one unauthorised, fraudulent transaction using their cards or account details.

Identity theft accounted for 124,000 victims of identity fraud. These victims included those who experienced unauthorised use of their personal details, such as a driver's licence, tax file number, or passport through fraudulent or forged identification documents, or unauthorised appropriation of their identity through any other means to conduct business, open accounts or take out loans illegally in their name.

There were varying rates of victimisation for identity frauds across the states and territories of Australia in the 12 months prior to the survey. Western Australia had the highest victimisation rate for all combined identity frauds, at 3.5% of the population aged 15 years and over (56,100 people), followed by Victoria (3.4% or 141,300 people). South Australia had the lowest victimisation rate at 2.2% or 27,600 people.

Victimisation rate for identity fraud(a), By states
Graph: Victimisation rate for identity fraud, By states



SNAPSHOT OF SCAMS

Over 5.8 million Australians were exposed to a scam in the 12 months prior to the survey. This involved people receiving and viewing or reading an unsolicited invitation, request, notification or offer, designed to obtain their personal information or money or otherwise obtain a financial benefit by deceptive means.

A successful scam requires an engagement or response from a person to an unsolicited invitation, request, notification or offer. Of those who had received a fraudulent invitation or request, 5.7% (or 329,000 people) became victims by responding to the scam by supplying personal information, money or both, or seeking more information. This equated to a victimisation rate of 2%. The scam with the highest number of victims in the 12 months prior to interview was lotteries with 84,100 victims, representing a victimisation rate of 0.5% of the population aged 15 years and over. This was followed by pyramid schemes (70,900 victims or 0.4%), and phishing and related scams (57,800 victims or 0.4%).


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