Imagine logging into your bank account and finding your balance to be $100,000 below the figure you expected.
Unless you are a multimillionaire, you’d probably find yourself with a sickening sensation in the pit of your stomach, one that would only get worse if you learnt that the missing amount is not the result of an error but an online scam.
Your bank may offer some assistance, but are the banks doing enough to protect victims of these types of scams?
According to the Consumer Action Law Centre (CALC), the answer to that question, in Australia at least, is ‘no’.
Tom Abourizk, a policy officer at CALC, says Australian banks are lagging behind their UK counterparts when it comes to protecting customers and victims. Mr Abourizk points to the fact that a number of British financial institutions have signed up to a voluntary code, meaning banks should refund the money unless a customer acted fraudulently or with gross negligence.
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The code, says Mr Abourizk, “establishes an onus on the banks; they have a financialinterest to make sure their systems are up to scratch”.
Without a similar code, he says, it means the banking landscape for ordinary Australians is something of a “wild west”.
CALC is not alone in calling on Australia’s banks to do more to protect customers.
The Australian Consumer and Competition Commission (ACCC) has called for a code that would require banks to reimburse scam victims.
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An ACCC spokesperson said: “The ACCC considers that reimbursement models should apply particularly in situations where an organisation has failed to take steps that could have protected the consumer or prevented a scammer opening an account.”
Again, this will place greater onus on banks to improve their security measurements. The ACCC says the technology to do so already exists and has resulted in a 35 per cent reduction in misdirected payments in the UK.
Known as Confirmation of Payee (CoP), the technology involves checking the name of the payee’s account against other details given by the payer. In Australia, the major banks use technology known as PayID, but critics say this puts the onus on the customer.
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Despite flagging tougher codes for banks ahead of last year’s federal election, the Albanese government has since shown a reluctance to make banks liable for scams.
In November, financial services minister Stephen Jones pushed back against the idea, saying it would lead to more scams.
“I don’t support this approach,” he said. “There should be a high bar on what is expected by all of our institutions – but if they meet all of their obligations it doesn’t seem right that they are liable. If banks always pay, the net result creates a honey pot for scammers.”
So, for the time being at least, it is the bank customers who will bear much of the responsibility of protecting themselves from scammers.
Victims seeking support can go to the Scamwatch website, operated by the ACCC in conjunction with the Australian government.
Have you been the victim of a scam? Do you feel you received adequate support after the event? Why not share your thoughts in the comments section below?
My computer was hacked last month when on my computer gave an alert that a virus had attacked it and that the Microsoft logo with a telephone number came up to call immediately. I trusted this as I had antivirus and malware protection from Microsoft on my computer.
This action of calling and like in past experiences of Microsoft helping me on my computer, I let the other end of the phone call remote in. This resulted in $200,000nbeing removed from my 2 bank accounts over a period of 4 days.
The hackers were very sophisticated as they kept me in the hanging for days in supposedly helping them with the Australian cybersecurity agency trying to bait supposed bank employees who were selling data of their customers.
To keep a long story short, my two banks did not come to my aid in compensation as I in effect gave access to the hackers to my computer. Forget about all the work you do to keep your accounts safe through good passwords and avoiding scams. I did end up getting $50,000 back from the financial institution to which a portion of my money was sent to from one of my bank accounts. This i believe was because I called them when I found out to whom the money was sent to. My biggest beef of my experience (apart from losing my life savings) was having to wait on the phone for hours on end to the Scam section of the bank to report the event and supply information. It was truly mental cruelty listening to the same music and messaging and you couldn’t get away from it!
There are two separate issues here, one is should the banks be doing more to stop scams and secondly should banks bare the financial responsibility of scams?
On the first, I believe banks could and should be doing far more to prevent scams. Surely when large sums are suddenly transferred out of character to known scam centres such as Nigeria or Russia and some East European countries the bank should check with the client by phone first.
On the other hand I don’t see why we should all bare higher bank fees to compensate naive, love sick participants of cat fishers and the like. We all need to take responsibility for our own money.
We stopped using banks to pay for any purchase a few years ago. We pay by PayPal because they refund our money in the event of a scam seller by debiting the seller’s PayPal account.
Neither Aussie banks nor the Government are doing the right thing to ensure bank customers are safeguarded. This means far less people will use banks.