Australia’s banks are finally introducing new rules aimed at protecting you against scammers, bringing us into line with similar economies around the world.
Responding to pressure from customers and regulators, and as part of a major crackdown on scams and fraud, banks will now block money transfers where the name listed by the sender does not match the details of the recipient.
The new rule is the centrepiece of a suite of anti-scam measures to be undertaken as part of the Scam-Safe Accord, signed by members of the Australian Banking Association (ABA) and the Customer-Owned Banking Association (COBA).
Between them, these two groups represent the majority of our banks and credit unions.
Anna Bligh, ABA CEO and former Queensland premier, says the agreement represents the banking industry’s genuine desire to protect customers against scams.
“This Scam-Safe Accord is a new offensive in the war on scams,” she says.
“It reflects the banking sector’s unwavering commitment to safeguarding every Australian. It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams.”
As part of the accord, ABA and COBA members will spend a combined $100 million on a new ‘confirmation-of-payee’ system that will be able to identify transaction mismatches immediately.
The design of the industry-wide system is to start straight away, and the technology will be rolled out over the next two years.
In addition to tech upgrades, the accord includes a major expansion of intelligence sharing across the sector with all banks agreeing to act on scams intelligence received from the Australian Financial Crimes Exchange by mid-2024, and to join the Fraud Reporting Exchange.
Banks will also be introducing “new and higher protections” into their internal fraud-detection services. Customers should expect to start receiving more notifications and payment delays when sending money to a new payee.
Biometric security will be introduced for customers opening new accounts in order to prevent identity theft. It’s not clear exactly how this would work, but presumably would involve facial recognition technology or even fingerprint collection.
Change can’t come soon enough
Last year, Australians lost a combined $3.2 billion to scammers and the July to September 2023 quarterly report from the National Anti-Scam Centre (NASC) shows losses of more than $110 million.
Investment scams and romance scams (involving bank transfers) are still the most prevalent scams, but the NASC data also shows losses to false billing scams have jumped 25 per cent in just the past three months.
Ms Bligh says although bank scam losses are still unacceptably large, a lot of money has been returned by banks to victims.
“Recent data from banks shows that $600 million in stolen funds has been returned to customers over the last year,” she says.
“To keep up this effort it is critical that government, banks, telcos, social media and crypto platforms work together as part of an eco-system to stay one step ahead of sophisticated criminal gangs.”
Have you been the target of any scams? Are banks doing enough to protect you against scam losses? Let us know in the comments section below.
Also read: How myGov is changing to protect you from scammers
I wonder how much the $600 million returned to customers represents in terms of total stolen funds. Australian Banks need to keep up with the protection offered by their overseas counterparts. Their profits are certainly large enough to provide more support to the average Joe that may have lost their life savings through sophisticated scams that impersonate bank fraud departments.
Unfortunately, nothing is secure on the internet. “Whatever man makes, other men can unmake” is a truism.