Identity crime costing Australia $1.6b every year, govt says

Approximately 900,000 Australians experienced identity crime in 2013 finds Attorney General report

The economic impact of identity crime on Australia is costing the country up to $1.6 billion each year, according to a new report by the federal Attorney General’s Department.

The report, <i>Identity crime and misuse in Australia</i> (PDF), found that the cost of investigating identity crime by law enforcement agencies and prosecutions by criminal courts amounted to $76 million.

The remainder of the $1.6 billion cost came from financial fraud - such as credit card fraud.

“The majority of identity crime is classified as credit card fraud and while most victims lose less than $1,000, in more serious cases losses can run into the hundreds of thousands,” read the report.

Some victims have lost up to $310,000 to fraudsters.

“The total value of credit card fraud was being driven upwards by card-not-present [CNP] fraud – where a fraudulent transaction is made using only the credit card details and not the physical card. In 2005-06 there were over $13 million worth of CNP frauds, but in 2012-13 that figure reached more than $82 million – an increase of 600 per cent in just eight years," read the report.

According to the report, between 750,000 and 937,000 Australians fall victim to identity crime every year, resulting in financial loss.

The Australian Institute of Criminology (AIC) conducted an survey with 5000 people in 2013. The survey found that 9.4 per cent of respondents reported having their personal information stolen or misused in the previous 12 months, with five per cent reporting that they suffered financial losses as a result.

The AIC survey also found that approximately 1 in 10 identity crime victims experienced mental or physical health issues requiring treatment while around one in 17 is wrongfully accused of a crime.

Citing intelligence data from the Australian Federal Police (AFP) and the Department of Foreign Affairs and Trade, the report found that some fraudulent documents can be purchased cheaply on the Internet black market.

For example, a Medicare card can be bought for $80 while a few hundred dollars will land the criminal a birth certificate or drivers licence.

However, a `genuinely’ issued passport with fake details can cost the fraudster up to $30,000.

“Of the 40,000 fraud offences proven guilty each year in Australia, around 15,000 of these were enabled through the use of stolen or fabricated identities. In addition, there are also around 7,000 core identity crime offences proven guilty each year, including activities such as manufacturing fraudulent credentials and false representations,” read the report.

According to the report, many of the methods criminals use to commit identity crime are quite old.

One method known as "tombstone fraud" involves the theft and use of an identity belonging to a deceased person, read the report.

“In many cases this could be prevented through checks against death records whenever an application for an identity credential is lodged. Work is currently underway to improve national systems to make these checks more widely available,” said the report.

The report also found that increased use of the Document Verification Service (DVS) by government agencies and private sector companies will improve the ability to detect fake identities.

The DVS links organisations that rely on clients' evidence of identity information with the authorities that issued it. If a person presents a document such as a passport or a driver’s licence to an agency or enterprise as identity proof, the organisation can use the DVS to check the document with the relevant agency.

“As these counterfeit credentials become harder to use, there will be stronger incentives for criminals to seek legitimately issued documents with fraudulent details, both through methods such as the theft or takeover of real identities, or through compromising the processes of credential issuing agencies,” read the report.

“To help prevent this from occurring on a widespread basis, the agencies that issue these credentials will need to strengthen their identity verification processes. Given the interdependencies of Australia’s identity infrastructure, this will require a consistent, whole-of-government approach.

The report also found that the Australian federal government is working to combat identity crime through a number of strategies including:

  • AFP and state/ territory police reporting on the cost, quality and availability of fake documents

  • Ensuring police agencies and criminal courts incorporate specific types of identity crime offences such as stealing and selling identities into data systems

  • Establishing a fraud and anti-corruption centre within the AFP to strengthen the capability of law enforcement to respond to identity crime

  • Developing National Identity Proofing Guidelines (PDF) to strengthen identity verification processes used by government agencies

  • Supporting iDcare, a not-for-profit support service for victims of identity crime, based in Sippy Downs, Queensland

Follow Hamish Barwick on Twitter: @HamishBarwick

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Tags fraud reductionidentity theftAttorney-General's DepartmentAustralian Institute of CriminologyCredit card fraudidentity crimeIdentity Protectionfraud

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