Scam victims in Australia are calling for legislation similar to the UK’s, which mandates banks to reimburse customers for losses incurred through scams. Starting October, the UK’s Payment Systems Regulator will require banks to compensate customers tricked into transferring money by scammers.
In Australia, the problem is escalating, with over 140,000 scam cases reported this year alone. Victims often find themselves blamed by banks for the scams, leading to frequent rejection of their complaints. Despite this, the Australian Banking Association has resisted calls to adopt the UK’s reimbursement model, attributing the issue to inadequate actions by social media and telecommunications companies rather than banks themselves.
Stephanie Tonkin from the Consumer Action Law Centre argues that Australian banks should be responsible for protecting customers’ funds, especially as online transactions become more prevalent. She dismisses concerns that requiring banks to reimburse scam losses would encourage more fraud, noting that scammers operate without ethics regardless of such policies.
The big four Australian banks—Commonwealth, ANZ, NAB, and Westpac—reported over $30 billion in profits for the 2023 financial year, which suggests that compensating scam victims would constitute a minor fraction of their earnings. A recent report from the Australian Securities and Investments Commission (ASIC) found that only 7% of customers who complained about scams received reimbursement. Smaller banks also showed gaps in scam detection and prevention.
ASIC deputy chair Sarah Court emphasized the need for banks to streamline the complaint process and for social media platforms to play a role in combating fraud.
While Anna Bligh of the Australian Banking Association noted the $100 million investment in new fraud prevention technologies and initiatives like the Scam-Safe Accord, she acknowledged that preventing scams requires collaboration with telcos and social media platforms to protect consumers effectively.
