The internet has vastly increased the convenience of banking, but on the flip side, it has also spawned a sophisticated and relentless scam ‘industry’.
It would be a vary rare Australian who has not been the target of a scam, be it an email asking for banking details or a text confirming a ‘payment’. And while many of us are vigilant, unfortunately they often work. According to the Australian Competition and Consumer Commission (ACCC) financial scams are by far the most successful scams, with Australians losing $1.3 billion in the 2022-23 financial year.
Often it starts with a data breach, where the scammers use your personal information to launch a campaign to get you to hand over your money.
A new report from NAB shows most Australians have had their personal information exposed in the last 12 months, highlighting the escalating threat of cyber-crime in the country.
In all, two-thirds (63 per cent) reported they had fallen victim to a cyber-attack or data breach, with half of those impacted hit on multiple occasions.
Cyber security
The report, released as part of International Cyber Security Awareness Month, underscores the growing concern among Australians about their online safety. Sixty-two percent of respondents stated they were ‘concerned’ or ‘very concerned’ about their personal cyber security, with a further 31 per cent at least ‘slightly concerned’.
Despite this high level of awareness, a significant gap remains between knowledge and action. While 85 per cent of Australians claimed to be ‘quite familiar’ or ‘very familiar’ with basic cyber security practices, only 16 per cent reported consistently following these practices.
NAB chief security officer Sandro Bucchianeri said the findings reflected the escalating and overwhelming threat Australian businesses and individuals were facing daily.
“In today’s digital world, cyber-attacks are surging at an alarming rate just as Australians are contending with other challenges including the high cost of living,” Mr Bucchianeri said.
“Our research found the most common ways Australians had personal information compromised were through cyber-attacks on major companies (38 per cent of Australians) and falling victim to phishing scams (34 per cent).”
More protection for consumers
The report comes as the government is preparing legislation to hold banks and financial institutions more responsible for their clients losing money to scams.
Draft legislation is underway that could lead to fines of up to $50 million on banks, mobile networks and social media companies that fail to act on scams. The proposal will require them to report scams as soon as they are detected. The draft rule will expose them to fines of up to $50 million if they fail to resolve the problems.
However, unfortunately for consumers, under the proposed legislation there will be no obligation to repay clients who have lost money in scams.
Banks have been exposed as dragging their feet on the issue.
An Australian Securities and Investment Commission report found that banks’ response and policy for to scams was “less mature” than expected.
ASIC’s report found that:
- the banks had inconsistent and narrow approaches to determining liability,
- scam victims were not always well supported by their bank,
- there were gaps and inconsistencies in how the banks detect and stop scam payments
As for bearing financial responsibility for the scams, the report found:
ASIC’s report observed that:
- bank customers are overwhelmingly the bearer of scam losses, accounting for 96 per cent of total scam losses across the banks,
- collectively, the banks detected and stopped a low proportion of scam payments made by their customers (approximately 13 per cent of scam payments),
- the reimbursement and/or compensation rate varied but was low across the individual banks, ranging from 2 to 5 per cent.
What you can do
NAB’s top four tips for individuals and businesses to protect against scams are:
- Update software regularly.
- Recognise and report phishing or other cyber-crime.
- Use strong, unique passwords for every different application.
- Turn on Multi Factor Authentication (MFA)
Have you lost money in a financial scam? Did you feel supported by your banker? Why not share your opinion in the comments section below?
Also read: Warning over heartbreaking financial assistance scams
