Banks have been given permission to work together to develop an industry standard for dealing with the ever-increasing avalanche of scams.
The Australian Banking Association (ABA) and its member banks will be able to jointly develop strategies to prevent, detect and disrupt scams affecting individual and small business customers following a conditional interim authorisation from the Australian Competition and Consumer Commission (ACCC).
ACCC deputy chair Catriona Lowe says only through collaboration will the banking industry be able to achieve any kind of protection against the increasing number of scams.
“A coordinated response across government, law enforcement and the private sector is essential to effectively combat scams that are evolving rapidly and with increasing sophistication,” she says.
The ABA requires this permission from the ACCC to avoid being accused of collusion on matters that don’t relate to scam security.
The authorisation includes strict measures to manage the risk of the banks coordinating on anything beyond scam prevention and customer redress.
Ms Lowe says: “We have acted quickly on this interim authorisation because the proliferation of scams is causing significant detriment to consumers and businesses alike, and the banking sector has a key role in combatting scams and recovering losses.”
The authorisation applies to all ABA member banks: AMP Bank, ANZ, Bank Australia, Bank of Queensland Limited, Bendigo and Adelaide Bank Limited, Citigroup, Commonwealth Bank of Australia, HSBC, ING Bank, J.P. Morgan Australia and New Zealand, Macquarie Bank, MUFG Bank, National Australia Bank, Rabobank Australia, Suncorp Bank and Westpac.
Ms Lowe says: “We have placed reporting conditions on the ABA to ensure we are informed of the progress of their discussions, including consultation with stakeholders …
“The ABA will be required to provide regular reports on any industry initiatives they propose, such as circumstances where customers would be reimbursed or entitled to remedies.”
The ACCC noted that the federal government recently announced a legislated cross-industry code would be introduced for banks, telcos, social media platforms and others.
The consultation comes as losses from scams reach record levels. ACCC data shows Australians lost a total of $3.1 billion to scams in 2022 – an 80 per cent increase over 2021.
“Australians lost more money to scams than ever before in 2022, but the true cost of scams is much more than a dollar figure as they also cause emotional distress to victims, their families and businesses,” Ms Lowe says.
“As scammers become increasingly sophisticated in their tactics, it is clear a coordinated response across government, law enforcement and the private sector is essential to combat scams more effectively.”
Will banks working together be more effective at preventing scams? Or is letting them collaborate a recipe for disaster? Let us know what you think in the comments section below.
Also read: Bank response to scam victim left family despondent, bewildered and out of pocket
Strewth! $10 BILLION DOLLARS profit – other banks ditto…. And yet….
They had a CHOICE to NOT raise interest rates many times but instead they CHOSE shareholder and executive profits! Certainly NOT the generations of young Australians who can’t afford to maintain their mortgage. Bank foreclosures serve the bank in inflating their already BLOATED profits. Kids today are HOSTAGES To Rapacious banks and property developers and investors!!! The fittest financially always remain powerful.
This sounds all too typical of Australian government in-action, locking the stable door after the horse has bolted. It’s consistent with federal and State emergency ministers meeting in three weeks time, ie at the start of the bushfire season to plan for the bushfire season and our nuclear submarines, maybe, perhaps arriving 20 years after its predicted we’ll need them.
Ms Lowe says: “We have acted quickly on this interim authorisation because the proliferation of scams is causing significant detriment to consumers and businesses alike, and the banking sector has a key role in combatting scams and recovering losses.”
Quckly, really? Scams were already significant in 2021 and grew by 80% last year, was no-one watching? Don’t we have a highly paid E-safety Commissioner working for the people keeping an eye on this?
There are some very easy steps all banks could have taken years ago and could be implemented right now. These include ensuring all new payees must be authorised by the account holder via multi-factor authentication. Establishing and building a list of questionable recipient nations such as Nigeria, Russia, North Korea and so on where ordinary people would rarely send money and hold suspect transaction until cleared by the payer. A warning of which country the money is being transferred to would also help.
One of the big four banks has only this month allowed customers to use more than six character passwords to protect their accounts. The same bank has no facilities to inform customers as transactions occur yet it’s subsidiary does. More needs to be done and can be done.
UK banks have been voluntarily reimbursing scammed clients for the past four years, yet MS Lowe says the ACCC has acted quickly!! I suppose we should be thankful then that they haven’t acted at normal speed.
It’s difficult to stop those determined to persue a romantic money trail but banks surely know that very few elderly people of limited means would normally transfer their life savings to Nigeria. There are many obvious warning signs which surely could be acted upon to frustrate this insidious theft right now!
Leaving it to the banks to come up with a plan just won’t work. We’ve seen how self regulation works with Banks from the Royal Commission findings. Self regulation doesn’t work, period.
It needs legislation with harsh penalties and jail time.
Follow the UK’s example and make the banking and financial industry responsible for most losses and they’ll soon start putting in place processes to make scamming far more difficult.
When one bank can post a $10 billion profit then they can afford to implement and strengthen fraud processes without affecting the bottom line to much.
Feel like such an idiot thinking banks would do the right thing.