Due Diligence Fraud
5 mins read

Fraud in Australia – Everything you need to know 

Fraud has become an increasing concern for Australian businesses as criminals incorporate more sophisticated techniques into their scams. 

This article aims to provide a comprehensive overview of fraud in Australia, including its definition, prevalence, types, warning signs, major recent cases, steps to report fraud and effective prevention strategies. 

Overview of Fraud in Australia

Fraud encompasses the deliberate and deceptive manipulation or distortion of information for personal or financial gain. In Australia, the prevalence of fraud has witnessed a notable rise, driven by technological advancements, the effects of globalisation, and the increasing sophistication of fraudsters. The impact of fraud extends far beyond monetary losses, as it erodes trust, undermines confidence, and disrupts the stability of various sectors. 
 

Understanding the main types of fraud prevalent in the country is crucial for individuals and businesses to protect themselves against potential financial losses and other detrimental consequences. Let’s delve into the key categories of fraud that commonly occur in Australia and the warning signs that can help identify fraudulent activities. By being informed and vigilant, individuals and businesses can play a proactive role in safeguarding their financial wellbeing. 

Main types of fraud in Australia

Identity theft: Criminals acquire personal information to assume another person’s identity and engage in fraudulent activities, such as opening credit accounts or making unauthorised purchases. 
 

Investment scams: Unsuspecting individuals are lured into fraudulent investment schemes promising high returns, resulting in substantial financial losses. 
 

Online shopping fraud: Deceptive online sellers trick consumers into purchasing products that are never delivered or turn out to be counterfeit. 
 

Banking and credit card fraud: Fraudsters gain unauthorised access to sensitive financial information, leading to unauthorised transactions, fund withdrawals, or fraudulent purchases using stolen credit card details. 
 

Insurance fraud: Individuals or organisations manipulate insurance claims to obtain undeserved payouts or benefits, leading to increased premiums for all consumers. 
 

Tax fraud: Deliberate submission of false information or omission of details to evade taxes or claim excessive refunds. 

Warning signs of fraud

• Unsolicited requests for personal or financial information 
• Unexpected charges or withdrawals on bank or credit card statements  
• Suspicious online sellers offering unrealistically good deals 
• Requests for payment or personal information through unsecured channels  
• Receipt of bills or collection notices for unfamiliar accounts or services 
• Errors or discrepancies in credit reports or financial statements

Major cases of fraud in Australia

In recent years, Australia has witnessed several significant fraud cases that have impacted individuals and institutions alike. Some notable examples include: 

  • The “Bank Bill Swap Rate (BBSW) Scandal”: Multiple major banks manipulated the BBSW, a key interest rate, leading to substantial financial losses for consumers and investors.
  • The “NAB Fraud Scandal”: A former employee orchestrated a fraudulent scheme involving falsified loans, resulting in significant losses for the National Australia Bank (NAB).
What should you do if you need to report fraud or potential fraud?

If you suspect identity theft, follow these steps to report and address the issue: 
 

  • Step 1: Gather evidence: Collect any relevant documents, correspondence, or records related to the fraudulent activity.
  • Step 2: Contact your financial institution: Notify your bank, credit card company, or any relevant financial service provider about the identity theft.
  • Step 3: Report to authorities: Contact the Australian Cyber Security Centre (ACSC) or your local police station to file a report and provide them with all available evidence.
  • Step 4: Inform credit reporting agencies and request a fraud alert or credit freeze on your account.
  • Step 5: Update passwords and secure accounts: Change passwords for all your online accounts and enable two-factor authentication to enhance security.
How can you protect yourself from fraud?

Protecting yourself from fraud is crucial in today’s digital age. Here are some valuable tips and options for fraud prevention: 

  • First, safeguard your personal information by using strong and unique passwords for all your accounts. Avoid sharing sensitive details with unverified sources.
  • Keep yourself informed about the latest fraud techniques and scams. Stay updated through reliable sources and educate yourself on common warning signs.
  • Regularly review your financial statements, including bank accounts and credit card bills, for any unauthorised transactions or suspicious activities. Report any discrepancies to your financial institution immediately.
  • Exercise caution when presented with offers that seem too good to be true. Conduct thorough research, verify the credibility of sellers or investment opportunities, and trust your instincts.
  • Educate yourself about common fraud techniques, such as phishing emails or social engineering scams. Being aware of potential risks helps you identify and avoid fraudulent attempts.
  • Consider monitoring your credit report regularly for any unauthorized accounts or suspicious activities. Utilise fraud alerts or credit freezes for additional protection.
AML/CTF Act

The AML/CTF Act, an acronym for the Anti-Money Laundering and Counter-Terrorist Financing Act, is a crucial piece of legislation implemented by numerous countries, including Australia. Its primary purpose is to address the critical threats posed by money laundering and the financing of terrorism. By establishing a comprehensive framework of obligations and regulations, this act ensures that businesses, particularly those in the financial sector, take necessary measures to prevent their services from being exploited for illicit activities.  

The obligations imposed by the AML/CTF Act cover a range of essential areas, such as customer due diligence, reporting suspicious transactions, maintaining accurate records, and implementing robust internal controls and risk assessment procedures. These requirements collectively contribute to the detection and deterrence of money laundering and terrorist financing activities. 

In conclusion, fraud is a growing concern in Australia, impacting individuals, businesses, and the economy. Understanding the types of fraud, recognising warning signs and taking proactive measures to protect ourselves are crucial. By reporting fraud promptly and implementing preventive measures, we can help combat fraud and create a safer environment for everyone. Let’s stay vigilant, secure our information and work together to minimise the impact of fraud in Australia. 

Our fraud prevention tools

Smart ID 

Identity fraud is a major challenge for businesses to overcome. Traditional electronic identity verification methods leave gaps for fraudsters to impersonate someone by simply stealing their identity information because there is no verification to confirm whether the person being verified matches the person on the identity documents.  

SmartID compares and matches the individual’s ‘selfie’ taken at the time of verification, against government issued photo ID documents, such as Australian driver’s license or any passport using facial biometric verification. In addition, liveness checks ensure there is a real, live person that is being verified, not a photo or video of someone else that a fraudster is trying to impersonate. Speak to our team of experts at CreditorWatch today.  

KYC/UBO Reports

CreditorWatch’s Know Your Customer (KYC) procedures are designed to reduce the risk of exposure to fraud. Our Anti-Money Laundering (AML) reports enable you to comply with AUSTRAC’s AML/CTF legislation while safeguarding against criminal risks. These reports include checks for politically exposed persons (PEP), sanctions, adverse media, identity verification (VOI), and document verification services (DVS). These measures help in detecting, deterring, and disrupting fraudulent activities such as bribery, corruption, identity theft, and tax evasion.

Additionally, our Ultimate Beneficial Owner’s (UBO) report identifies the beneficial owner of a business. A beneficial owner is someone who directly or indirectly owns or controls a quarter or more of a company. It is possible for multiple individuals to be beneficial owners, which increases the risk exposure if any of these individuals are untrustworthy. Fortunately, CreditorWatch simplifies the process of identifying beneficial owners with just one click. This saves you from the hassle of reading lengthy ASIC reports and manually calculating ownership percentages for entities with complex structures. The UBO reports enhance transparency, enabling you to understand and investigate all stakeholders involved in a company. 

Get in touch!

To learn more about how you can better protect your business from fraudulent activity, speak to our team of experts today. 

due diligence fraud fraudulent banking Protection
Sarah Oliver
Marketing Coordinator
Sarah joined the CreditorWatch marketing team in May 2023, bringing with her a strong passion for helping businesses and individuals navigate the intricate world of credit through strategic marketing and effective communication channels.
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