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A new year's resolution that could make us $1.75 billion richer

Media Release

28 December 1998

Media release from Senator, the Hon Amanda Vanstone, Minister for Justice and Customs

A new year's resolution that could make us $1.75 billion richer

Minister for Justice and Customs, Senator Amanda Vanstone today released Best Practice in Fraud Prevention, a new paper from the Australian Institute of Criminology which examines strategies which have proven effective in reducing criminal fraud throughout the world.

"Effective fraud prevention should be a New Year's resolution for all businesses", Senator Vanstone said.

"This report highlights techniques which help prevent fraud without imposing unrealistic burdens on legitimate business activity."

"Successful strategies can be as simple as increasing the awareness of fraud through education campaigns. A publicity and education campaign by the Australian insurance industry reduced estimated losses incurred through fraud by more than half from 1994 to 1997."

"The Australian Institute of Criminology calculates that fraud costs the community $3.5 billion a year. If the results obtained by the insurance industry were translated across all sectors of industry and the community we would be some $1.75 billion richer."

"Recent business surveys have found that fraud is often carried out by employees, particularly at the senior management level. Fraud prevention and risk management strategies are critical, with security systems, pre-employment integrity screening and ongoing monitoring of integrity effective in reducing the risk of employee fraud."

"New technologies are proving to be highly successful in combating fraud. Improvements in personal identification, such as biometrics, and data matching have proved invaluable in the fight against fraud."

"A computerised personal identification system used by a retail chain in the US resulted in a 90 per cent reduction in credit card fraud losses over a 17 month period. These systems must, however, have due regard to security and privacy requirements."

"The Commonwealth Government has a stringent fraud control policy in place which focuses on effective risk management and fraud prevention, detection and investigation. It is encouraging to see that the use of explicit fraud control policies by the private and public sector is increasing. An example in the public sector is the launch earlier this month of the Australian Tax Office fraud prevention CD-ROM, Judge for Yourself."

A survey in 1994 revealed that only 27 per cent of Australian organisations had fraud prevention policies, while a 1997 survey showed that almost 75 per cent did.