More than 35,000 Australian passports go missing each year, according to figures that have been released by the Department of Foreign Affairs and Trade since Malaysia Airlines flight MH370 disappeared on Saturday.
Worldwide security fears have been raised because two passengers on the flight were travelling with stolen Italian and Austrian passports.
In 2012-13, 37,720 Australian passports were reported lost or stolen, but this is only 0.3 per cent of the 12 million on issue.
In 2011-12, 38,062 went missing and in 2010-11 it was 36,161.
About 75 per cent are reported lost or stolen in Australia. Many of the others go missing in key tourist destinations such as Paris, Madrid, Rome, London, Los Angeles and Bangkok, DFAT says.
There have been reports of bar girls in Thailand stealing passports from customers for a commission and instances of backpackers selling their passports to get some extra cash.
Australian passports that are lost or stolen are cancelled immediately and reported by DFAT to Interpol daily for inclusion on the intelligence agency's database.
Interpol has reported that only the US, UK and the United Arab Emirates systematically check passports against its stolen list.
Last year passengers were able to board planes more than a billion times without having their passports screened against the database with 40 million entries.
The US searches this database annually more 250 million times; the UK more than 120 million times and the UAE more than 50 million times.
In Australia, it is not just the thieves who face penalties, but also the passport holders who have lost them.
The Australian Passports Act 2005 introduced a range of fees and sanctions for people who lose them, even if they are stolen.
The sanctions were introduced "to encourage passport holders to better protect them", a DFAT spokesperson said.
In addition to normal application fee of $244, a "fine" of $108 is charged for one lost or stolen passport in five years; $244 for two lost or stolen in five years; and $487 for three or more in five years.
The bearer is also required to attend an interview and to provide extensive and time-consuming details to confirm their identity.
If lost overseas, the holder can be issued with an emergency passport at the closest Australian mission.
Australian ePassports (issued since October 2005) have a secure chip that includes a digital copy of the passport photo. The chip can be read at the border and the digital photo viewed and compared with the photo in the passport.
DFAT says it is not possible to rewrite or alter an Australian ePassport chip.
"The Australian ePassport chip is locked. If someone attempts to alter the information the chip will shut down and become inoperable," the spokesman said.
Australia's passport checks
Buying a ticket
No passport details required when buying a ticket for an international flight.
At the airport
The first passport inspection is at the check-in counter. Staff visually check the photo on the passport against the face of the person at the counter, and ensure the name on the passport matches the name on the ticket.
A customs officer makes another visual check of the passenger against their passport photo. All passports are scanned. This should trigger any local police alerts and catch any stolen passports listed on Interpol's international database. Many other countries do not make this check. But the customs check for departures — unlike those for all people entering Australia — do not involve biometric technology, which removes the risk of human error in facial recognition.
All flights to the US and some airlines require another passport or photo-ID check, to ensure it corresponds to the name on the boarding pass.
The only screen of passengers is at check-in: a photo ID, not necessarily a passport, is checked against the person at the counter and the name on the air ticket. There is no photo ID check at the boarding gates.