During the COVID-19 pandemic, as more Australians turned to online banking and shopping, the incidence of card fraud significantly increased. The Australian Bureau of Statistics reported that in 2020-21, personal fraud affected 11% of Australians, up from 8.5% in 2014-15, with losses amounting to more than 2 million victims. Card fraud, where criminals access banking or credit-card details to steal money, was the most common fraud type.
The shift to remote work led to a notable uptick in these fraudulent activities, especially impacting individuals aged 35 to 54. The Australian Payments Network notes that fraud involving bank and credit-card transactions reached $490 million in the 2020-21 financial year, a 9.2% increase from the prior year. This coincided with a substantial rise in online spending due to lockdowns, leading to a predominant mode of fraud called ‘card-not-present’ fraud, constituting 90% of the fraudulent activity on Australian cards.
Financial institutions, credit-card companies, and merchants are typically responsible for refunding fraud losses on payment cards, provided consumers have not compromised their financial details. Despite these security measures, individuals like retail worker Samantha Gray have faced issues with unauthorized transactions, such as repeated charges for services like Netflix. Although banks often refund the money lost to such frauds, the amount refunded may not always cover the total loss, as in Gray’s case.
The rise in scams and online fraud has prompted financial leaders like Anna Bligh, head of the Australian Banking Association, to emphasize the significant investments banks are making to combat these issues. Commonwealth Bank, for instance, has increased resources and introduced new AI technology to detect and alert customers to potential scams. However, consumers are cautioned that certain situations may not guarantee a refund, such as when personal identification numbers (PINs) are disclosed or fake links for online banking are clicked. Nonetheless, in most instances where customers have not violated their card’s terms and conditions, refunds are typically issued.
Analysts see the refunds from card fraud as a manageable cost for banks, part of their service to assure customers of the safety of their money. Consumer advocates like Gerard Brody from the Consumer Action Law Centre see scams as a growing concern, particularly affecting the elderly and vulnerable. Brody advocates for UK-style protections that obligate banks to compensate customers who are deceived into sending money to scammers.
Authorities are taking action against these fraudulent activities, with measures to block and trace text message scams and recommendations for consumers to monitor their bank statements closely. As a personal precaution, consumers like Samantha Gray have adopted strategies such as setting up separate debit cards for regular payments to further safeguard against fraudulent transactions.
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