A young Melbourne has been arrested in Bali, accused of stealing a pair of $550 earring from an upmarket store in Seminyak.

The woman, Catherine Anne Hogg, from St Kilda, is now in detention at Kuta police station while police investigate the incident, which carries a maximum five-year jail term.

Her lawyer says that it is all a ‘misunderstanding’ and she had no intention of stealing the earrings.

The 21-year-old woman, who police have said says she is a photograph model, was arrested at 1:30 PM on Sunday. She was on holiday and staying in a hotel in Seminyak.

Hogg is alleged to have asked store staff to see a pair of silver-plated Swarovski crystal earrings which were in a showcase. A staff member is alleged to have given her the earrings, bearing crystals and green stones, to Hogg while serving other customers.

Hoggs lawyer Made Bandem Danan Jaya said “It’s just a misunderstanding. She has no intention to steal the earrings. She just tried it (on). Then someone called her (phone) and she went outside to hang up. But then she forgot about the earrings.’

She is the second Australia to be arrested in Bali this week. A 41-year-old has also been detained in Denpasar on drugs charges.