The Australian Competition and Consumer Commission (ACCC) has given banks the green light to work together on scam protection measures, as the fight to protect consumers and small businesses steps up.
According to the ACCC’s annual Scamwatch report, the nation's scam problem has reached plague proportions, with nearly half of all Australians last year being scammed or receiving a fake text message that saw a combined $3.1 billion lost to fraudsters, up 80 per cent from 2021.
The fake text scams usually appear to come from legitimate sources, such as toll operators, courier companies or government agencies – this writer received one purporting to come from MyGov this morning – and has led the federal government to allocate $10 million for a national SMS registry to help telcos block scam text messages impersonating official agencies or organisations.
In its interim authorisation announced this morning, the ACCC has allowed the Australian Banking Association’s Members “to participate in discussions for the purpose of developing potential industry initiatives to prevent, detect, disrupt and respond to scams affecting individual and small business customers, and to develop and in principle agree to the content of a standard reflecting these initiatives.”
Last month, the Federal government also launched the National Anti-Scams Centre (NASC), boasting a ‘hit squad’ from various agencies charged with disrupting gangs running damaging scams.
Based in Melbourne and designed as a ‘fusion cell’ staffed with experts from government, law enforcement, and the private sector, the NASC – funded in May through a $58 million Budget commitment – began operating on 1 July.
The banking sector has been under increasing pressure to deal with the scourge, with the Consumer Action Law Centre calling for banks to be forced to reimburse customers who have fallen victim to a scam where the funds have been paid into bank accounts controlled by fraudsters.
Currently, the reimbursement of victims’ funds is at the discretion of banks on a case-by-case basis, unlike other jurisdictions such as the UK where from 2024, those affected by these scams will have their money returned within five days.
In response, the banks have stepped up their efforts to tackle the problem.
In May, a new collaboration between 17 Australian banks, the Fraud Reporting Exchange (FRX) was official launched with claims it had already halved the time it takes to identify and block payments to scam operators.
The FRX and its owner, the bank-funded Australian Financial Crimes Exchange (AFCX) security intelligence initiative, are a smaller subset of the Australian Banking Association’s twenty members which include the big four banks along with Macquarie Bank, AMP Bank, Bendigo and Adelaide Bank Limited, SunCorp Bank, and global operators including Citigroup, HSBC, ING Bank and JP Morgan.
In announcing the authorisation, ACCC Deputy Chair Catriona Lowe said “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.
“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 combating scams and recovering losses.”
The ACCC also stated its authorisation includes strict measures to manage the risk of the banks coordinating beyond scam prevention and customer redress.