Banks should be forced to reimburse customers who have fallen victim to a scam, with new data showing that mere education campaigns are not enough, according to the Consumer Action Law Centre.
The Australian Competition and Consumer Commission (ACCC) released its annual report on scams this week, revealing that the combined losses Australians suffered from scams reported to government agencies was at least $3.1 billion in 2022, up just under 80 per cent from the previous year.
The report also found that the average amount an Aussie is losing to a scam is $20,000, a 54 per cent increase from 2021.
The ACCC also said that nearly a third of all losses are likely going unreported, meaning the true losses last year could be as high as $4.3 billion.
In response to the report, the Consumer Action Law Centre has called on the federal government to mandate banks to reimburse their customers who have fallen victim to one of these scams.
“The huge scale of theft and losses revealed by the report demands that urgent, decisive action must be taken now by government,” Consumer Action CEO Stephanie Tonkin said.
“We agree with the ACCC that there needs to be a coordinated approach across government, the private sector and law enforcement, but the federal government must mandate the banks to reimburse customers caught up in scams, otherwise it just won’t work.”
The banking industry can play an important role in combating the growing threat of scams, but the government needs to force them to do this, Tonkin said.
“The banking industry can lead the way to protect customers and stop scams, but it will only do this if it is incentivised financially to do so, and the government needs to mandate this,” she said.
“Scammers are becoming far more sophisticated, using cutting-edge technology to trick and steal. We speak to people who call our helplines who have lost their entire life savings to schemes that destroy their finances causing disaster for them and their family, it’s heartbreaking.
“The evidence is clear, scams are so sophisticated that ‘education campaigns’ that push the blame on to victims just don’t work. We need action from government now that will help stop this crisis.”
According to the ACCC report, many scam victims do not seek to reclaim the lost money or report the scam at all.
“These can be life-changing losses and for most people, the process of recovery from a high-loss scam is long and difficult,” the report said.
“Many don’t report scams or seek help at all. More coordinated effort is required across government, the private sector and law enforcement to combat scams.”
Scammers are becoming more tech-savvy and sophisticated, the competition watchdog found.
“The losses are increasing because scams are harder to spot, and anyone can be caught,” the report said.
“Leveraging emerging technology, scammers impersonate the phone numbers, email addresses and websites of legitimate organisations. Their text messages can appear in the same conversation thread as genuine messages.
“Fake ads, social media profiles and reviews are easily, and cost-effectively deployed. This makes scams incredibly difficult to identify.”
In 2021 the federal government committed to a number of anti-scam measures, and provided seed funding to the ACCC for the establishment of a National Anti-Scam Centre, which will bring together government, regulators, industry and consumer groups to share intelligence, disrupt scams, empower consumers and find solutions to reduce losses to scams.