A new collaboration between 17 Australian banks has already halved the time it takes to identify and block payments to scam operators, the Australian Banking Association has said in launching the Fraud Reporting Exchange (FRX) to a country besieged by scammers.

Owned and operated by the bank-funded Australian Financial Crimes Exchange (AFCX) security intelligence initiative, FRX enables member banks to “jointly identify funds which have been fraudulently transferred,” ABA CEO Anna Bligh said as the new platform was officially launched.

By cross-matching data between participating banks, the new platform enables near real-time reporting of fraudulent transactions – allowing them to halt multiple fraudulent transactions that are occurring due to an ongoing scam.

FRX also facilitates intelligence sharing between banks to improve fraud and loss prevention, streamlining the return of funds and enabling secure, traceable inter-bank communications that reduce communication delays due to multiple calls and emails.

“Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” Bligh said, noting that FRX’s faster and more targeted communication means “banks are now better placed to jointly identify funds which have been fraudulently transferred.”

Scam victims used direct bank transfers to send a reported $210 million to scammers during 2022, according to the ACCC’s latest Targeting Scams report – a 63 per cent increase over the previous year that dwarfs the $12 million lost via credit card payments.

Participating banks at launch include the Big Four as well as second-tier organisations such as AMP, BoQ, HSBC, ING, Macquarie, Suncorp, and others.

An early trial of the platform had reduced the time to resolve most scam cases by more than half – with AFCX managing director David Pegley exhorting consumers to report fraudulent or scam payments to their banks so that action can be taken as quickly as possible.

FRX “is set to make an impact on scammers,” he said, “and can also be used to help bring together banks and any other organisations involved in payments. The sooner that banks know about a fraud, the sooner they can take swift action to try to halt the payment before it gets to the scammers.”

Fighting a rising tide of scams

The launch of FRX comes amidst concerns that Australia is being overwhelmed by scammers, with the ACCC warning that Australians lost more than $3.1 billion to scammers during 2022 alone.

That’s up 80 per cent over the previous year, with the ACCC noting that, with an estimated 30 per cent of scams not reported, actual losses are likely much higher.

Concern is running high enough that the Commonwealth government’s newly launched Budget committed $86 million to anti-scam initiatives including $58 million for the establishment of a new National Anti-Scams Centre (NASC).

NASC will enable faster sharing of scam information amongst police and regulators, with ‘hit squads’ of industry and law enforcement experts ready to target particular scams as they surge.

The initiative will also include an Australian Sender SMS ID registry, providing a ‘white list’ of phone numbers that can be used to block scam calls and SMS messages purporting to be from particular government agencies.

The registry received praise from telecommunications peak body Communications Alliance whose CEO, John Stanton, said the mandatory use of such a registry “can be a valuable addition to the armoury available to combat the increasingly sophisticated scourge of scam SMS.”

Telecommunications companies have been increasingly proactive in blocking scam-related numbers and messages since the introduction of a new industry code in 2021, with individual efforts blocking scams in their millions.

In March, the Commonwealth Bank of Australia (CBA) partnered with Telstra to trial Scam Indicator, a service that lets the CBA use a Telstra API to check whether a customer is on the phone while making a transfer – which the bank calls “the prime indicator that a scam is occurring.”

The new FRX will, similarly, enlist all members banks to the real-time anti-scam effort – and by enabling the rapid interception and recovery of scam payments, Bligh said, “more and more scammers are going to hit a brick wall.”