Bureau of Crime Statistics and Research

Understanding Fraud: The nature of fraud offences recorded by NSW Police

Wayne Macdonald and Jacqueline Fitzgerald

Crime and Justice Bulletin no. 180

Sydney, NSW Bureau of Crime Statistics and Research, December 2014

Release Date:    25 February 2015

Full report [pdf, 567kb]

Summary

Through detailed analysis of a sample of incidents, this paper categorises the types of fraud incidents reported to and recorded by NSW Police. It includes figures on: identity theft, credit card fraud, hacking, phishing and computer crime, corporate and white collar crime such as embezzlement and other types of cybercrime, among other fraud types.

Aim: 1) To provide an understanding of the nature of fraud incidents recorded by NSW Police. 2) To find out which fraud types are contributing to the increase in recorded fraud.

Method: This study involved the review of 1,000 narrative descriptions of fraud incidents reported to or detected by NSW Police. Where possible we gathered information about the type of fraudulent behaviour, modus operandi, cost and whether a suspect was apprehended. Half the fraud events sampled occurred in the 12 months to September 2009 and half in the 12 months to September 2013.

Results: The most common types of fraud reported to police were card fraud (35% of incidents), fuel drive-offs (30%), identity theft (5%), embezzlement (4%) and cheque fraud (3%). Increases in card fraud and fuel drive offs appear to account for the bulk of the increase in fraud over the past five years. Incident costs recorded by police suggest that in 2013 incidents of fraud recorded by police cost more than $200 million. The average cost of fraud by incident type ranged from just $62 per incident for fuel drive-offs to more than $35,000 per incident for embezzlement.

Conclusion: Fraud is a growing problem and will likely continue to rise with new technologies and payment options. This study found that the fraud types with the highest recorded prevalence are quite different to those which have the greatest overall cost implication.

Keywords: Fraud, white collar crime, corporate crime, identity theft, credit card, cost of crime, cyber crime, cybercrime

Figure - Common frauds reported to police and their average cost