Small banks need to do better on scams, says ASIC

When it comes to scam support, there’s no real difference between big and small banks, an Australian Securities and Investments Commission (ASIC) report reveals.

While the report focuses on smaller banks, specifically those outside the so-called ‘Big Four’, it calls on all banks to do more to fight scams. As well as prevention, this includes educating customers on how to avoid scams.

The report, titled Anti-scam practices of banks outside the four major banks, looked at 15 smaller Australian banks. It follows a similar analysis of the four major banks published last year, and identified a number of issues, including:

• significant variability in the maturity of scam strategies and governance
• inconsistent and narrow approaches to determining liability 
• a lack of support for scam victims.

These generally mirror ASIC’s 2023 observations of the major four banks. Last year’s report noted a highly variable approach to scams strategy and governance – “less mature than we expected”.

The report also noted that the major banks also had inconsistent and narrow approaches to determining liability. Furthermore, it noted that “scam victims are not always well supported” by these four banks. 

Scam education is just a start

ASIC’s findings will be disappointing to those who see the smaller banks as having a more customer-focused approach. ASIC deputy chair Sarah Court said: “Like the four major banks we reported on last year, the 15 banks in this latest report also demonstrated a less mature approach to scams strategy and governance than we expected.”

Ms Court noted that while Australians are better at spotting scams than in the past, more needs to be done. “We need continued focus across industry and regulators to effectively tackle this important issue,” she said.

Ms Court did allow the smaller banks some concessions, though. She said the report’s data was from mid-2023. This was before the delivery of key anti-scam infrastructure including the National Anti-Scam Centre and ASIC’s website takedown service.

Nevertheless, the report highlights areas in which all banks need to improve. “In case studies reviewed in the preparation of this report, ASIC observed examples of poor customer service.” These included slow response times, mishandling of reports, confusing communications, and failure to identify vulnerable customers impacted by scams.

In fairness to the banking industry, it’s not alone when it comes to being judged as having poor customer service. YourLifeChoices highlighted the telco companies as a less than shining example earlier this week.

On the other hand, if poor service plays a part in a customer being scammed, the cost could be far greater. “We expect all banks, regardless of their size, to pull their weight in the fight against scams,” said Ms Court. “Boards and senior management have a key role to play in driving improvement.”

In the meantime …

One hopes banks – major and minor – will respond to ASIC’s calls and start doing more to help customers avoid scams. In the meantime, there are things you can do to help yourself. ASIC recommends taking the following steps before you act:

• STOP – Don’t give money or personal details if you’re unsure. Say no, hang up, delete.
• CHECK – Scammers pretend to be from organisations you know and trust. If you’re not sure, call the official phone number of the organisation to check, and
• REPORT – to www.scamwatch.gov.au

Have you discussed scams with your bank recently? Do you feel you received adequate support? Let us know via the comments section below.

Also read: Branch closures and bank scams – is there a link?

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