After $1 million was siphoned off their company's accounts and their bookkeeper charged with 250 counts of fraud, a Brisbane couple wants banks to be more accountable for electronic fund transfer (EFT) fraud.
Key points:
- The Saggers' bookkeeper allegedly defrauded them repeatedly over a six-year period
- Banks in Australia don't have to cross-check account names against account numbers in EFT transactions
- Detective Inspector Vince Byrnes warns EFT fraud can have a "devastating" impact on people
Andrea and Brendan Saggers once ran a thriving business selling recreational vehicles and had their family's future mapped out.
But their dreams of an early retirement came crashing down when they discovered how much had been stolen from them over a six-year period.
Their bookkeeper has been charged with 250 counts of fraud and fraud-related offences in relation to the missing money, and accused of using electronic funds transfer fraud.
"We thought that our money was safe, we thought our lives were safe — but it's destroyed us," Ms Saggers said.
"Our children's futures are now changed, our lives have changed, and we've lost everything."
Mr Saggers said while thus far the money known to have been stolen from them was nearly $1 million, that figure was likely to rise as they continued to uncover the extent of the fraud.
EFT fraud occurs when a person manipulates bank account details so money is paid into their account rather than a legitimate account.
In Australia, banks are not required to cross-check the account name to the account number and BSB.
In the Saggers' case, their bookkeeper would allegedly enter the correct account name of the creditor the invoice needed to be paid to, but then type in her own BSB and account number.
On the business bank statements only the name of the creditor would appear, so the couple assumed their bills were being paid.
"Over a period of time it has built up to quite a lot of money and our bank statements all read creditors and not actually where the money went," Mr Saggers said.
"Creditors weren't jumping up and down saying they weren't getting paid because she was paying them but also paying herself."
Forensic accountant Brett Warfield, from Warfield and Associates, said the couple were not alone as victims of EFT fraud, describing the crime as "prevalent" in Australia.
"It doesn't matter the size of the organisation it gets down to the internal controls over the actual payment process," he said.
Mr Warfield said EFT fraud could go undetected for long periods.
"What often happens is the person whose making those EFT payments will, in fact, make two payments," he said.
"They'll make one to the contractor or supplier and they'll make another of the same amount, but to their own BSB and account number that looks like it's legitimising their payment to the supplier or contractor so they're effectively doubling up the payment.
"The owners of the business need to make sure they're on top of their cash flow, that's the main way you'll pick that up."
'The liability sits with us'
Mr Saggers said he hit a brick wall when he contacted the banks for help.
He said he had no idea account names were not checked and warned others to be aware of the potential for fraud.
"I'm old school, I'm hitting on near 60 — I'm accustomed to bank cheques and knowing that a cheque wouldn't go through if it's the wrong name and a different account number when you put your deposit slip in," he said.
"It's quite easy for anyone with access to joint bank accounts to defraud the person they're in that bank account with, just by putting a different account name and sending the money to anywhere they like."
Mr Saggers said banks should be cross-checking account names against account numbers and BSB in EFT payments.
"I think the banks are aware of this sort of fraud going on to an extent, and because of the disclaimers in the banking system they're covered so they don't really care," he said.
"Obviously, the banks don't want to pay the money to make it safe and secure ... expediency is the most important thing for them, but the liability sits with us and they shove that down your throat.
"If the correct account number and BSB is the important factor in the transfer, then why are they not on the bank statements?"
From next year, banks in the UK will be required to check account names are correct in online bank transfers in a bid to prevent fraudulent payments.
In a statement, the CEO of the industry umbrella body Australian Payments Network, Andy White, said when making payments through online banking facilities, payers were reminded by their bank to check BSB and account numbers carefully.
"Although the industry doesn't collect statistics on this, and notwithstanding growth in attempted scams, these controls mean that fraud is very low," Mr White said.
"Last year, there were some 3.9 billion direct entry payments processed, totalling $14.6 trillion.
"While a check against an account name could conceivably be added, this could cause a significant proportion of those payments to fail or be rejected, because names used tend to be derivatives of the actual name on the account.
"This would clearly not be a desirable consumer outcome.
"The industry is constant and vigilant in tackling new fraud activity. In addition, every institution works incredibly hard to combat fraud and respond to the ways fraudsters try to perpetrate fraud."
Job losses, marital problems
Mr Warfield said he had seen EFT fraud sink businesses and tear families apart.
"Some of these frauds have occurred in the amounts of hundreds of thousands, or millions of dollars," he said.
"I've seen businesses actually go into liquidation because of this.
"There's been marital problems, there's been impact on having to put people off in the business, so employees losing their jobs, so it has a flow-on effect when these transactions occur of a significant value."
He said he would support a move to make the banks cross-check account names, but acknowledged it would be logistically challenging.
"I think that would be an interesting exercise to see how banks could marry up account names and account numbers for all those transactions, but it certainly would be helpful if they could do that."
Detective Inspector Vince Byrnes from the Queensland police financial and cyber crime group said EFT fraud could have a serious impact on more than just a business's finances.
"The loss of monies, even in small amounts over a long period of time, can add up to have a serious effect on businesses and individuals," he said.
"Particularly if it's perpetrated by someone within the business — it has to suffer a loss and it's usually not recoverable through insurance.
"That can have a devastating emotional as well as financial effect upon the victims and the business itself."
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