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Bank majors told to lift their game after more than 31,700 customers were conned last year.
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ASIC fails big banks for $550m in customer scam losses
21 April 2023
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The Australian Securities and Investments Commission (ASIC) has given the big four banks a fail mark for scam protection after 31,700 customers lost $550 million over the last financial year.
The major banks detected and stopped just 13 per cent of scam payments and customers bore 96 per cent of the money lost, the ASIC review found.
Deputy chair of ASIC Sarah Court said the big four banks had to lift their game when it came to protecting customers from scams.
“Combatting scams is a critical task for all of corporate Australia – financial institutions, telecommunication providers, digital platforms and other organisations need to work cohesively to stop scams at the source,” said Ms Court.
ASIC’s report found that:
- The overall approach to scams strategy and governance at the major banks was variable and overall less mature than expected.
- The banks had inconsistent and narrow approaches to determining liability.
- Scam victims were not always well supported by their bank.
- There were gaps and inconsistencies in how the banks detected and stopped scam payments.
- While there were examples of emerging good practices, steps taken to help prevent customers fall victim to scams varied across banks.
Ms Court said the actions taken by banks would not necessarily help their customers but in some cases cause further distress.
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“Our review found there were inconsistent experiences and outcomes for customers who were the victim of a scam, and in some cases a bank’s response may contribute to further distress for a customer,” she said.
“Banks need to reconsider the ways they respond to and engage with scam victims to reduce further distress and help them better manage the situation.
“We’d like to see the banks take steps to evolve their scam management practices, including how they inform and educate customers and help them through what is a distressing time.”
Ms Court did also acknowledge the greater focus the big four banks had placed on combating scams but said it was not enough and more needed to be done.
“Australia’s big four banks have invested significantly in their anti-scam efforts over the last several years and have implemented a number of innovative and positive initiatives, including some recently implemented following the conclusion of ASIC’s review,” said Ms Court.
“However, the increasing prominence of scams means that there is still more to be done.”
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