Mandatory reimbursement of scam losses, except in cases of gross negligence, would incentivise banks to tackle this crisis head-on. Our banks have been slow to tackle the scam scourge because there is no financial incentive for them to do so. Rather than lay blame, banks must fully reimburse customers who inadvertently transfer money to these criminals, especially when many fraudsters operate their “businesses” with the help of Australian bank accounts. So, what needs to happen to fix this diabolical state of affairs? The banks must put their super profits to good use and urgently invest in the technology and systems that will make Australia less of a target for scammers.īanks must also change their attitudes and approach to customers who fall prey to sophisticated scams.

Banks have been slow to tackle the scam scourge because there is no financial incentive Banks tell our clients it’s the individual’s responsibility to recognise and prevent scams, even though scams are increasingly elaborate and sophisticated – often hijacking or replicating the banks’ own platforms. Until now, the policy of the major banks has been to shift the burden of responsibility for stopping scams onto consumers, even though they know they have fallen through the cracks through no fault of their own. A recent ASIC report confirmed what Consumer Action Law Centre sees on our frontlines every day Customers who lose money to this fraudulent, criminal activity are reimbursed a measly 2-5% of their losses. In the majority of cases, individuals who have been scammed have little chance of ever seeing their money again. We speak to retirees who, through no fault of their own, have lost their life savings. We have clients whose accounts have been bled dry by scammers, driving some families into poverty.

At today’s announcement, the minister pointed out that a byproduct of increased attention on scams will be that numbers of scams reported will also increase.Ĭommunity lawyers and financial counsellors are on the frontlines of the crisis and the stories they hear are sobering. This is a fraction of the real cost of scams in Australia. Australia’s scam epidemic is ruining lives across the country, with the Australian Competition and Consumer Commission finding $3.1bn in scam losses reported to government agencies in 2022. Yet despite increasing profit margins, the major banks continue to underplay a crisis that is affecting thousands of their customers and causing untold financial and emotional distress in the community.

Rising by Stephanie Judice