Powered by MOMENTUM MEDIA
cyber daily logo

Breaking news and updates daily. Subscribe to our Newsletter

Breaking news and updates daily. Subscribe to our Newsletter X facebook linkedin Instagram Instagram

Surging scam losses prompt ACCC to push banks to act

After Australians lost a record $2 billion to scams last year, the Australian Competition and Consumer Commission (ACCC) has taken aim at the major banks to adopt safeguards to stop fraudsters tricking victims and stealing their money.

user iconReporter
Fri, 22 Jul 2022
Surging scam losses prompt ACCC to push banks to act
expand image

The major banks have attracted staunch criticism from Delia Rickard, deputy chair at the Australian Competition and Consumer Commission (ACCC), for “reluctance” to adopt key measures to prevent fraudsters from running scam campaigns.

“People are losing a fortune, and we are calling on the banks to address it and introduce ‘Confirmation of Payee’,” Rickard said.

Following the release of the ACCC report that found Aussies had lost $2 billion to scammers last year, which equates to double the $851 million lost to fraudsters in 2020, Rickard has called for banks to do more to protect consumers.

============
============

In Europe and the UK, protections have been put in place that monitors bank transfers by matching a recipient’s bank details with their name. Named “Confirmation of Payee”, it is designed to provide “greater assurance” that provides an “additional layer of protection” in the fight against fraud and scams, according to UK Finance.

According to the ACCC, over $227 million was lost to payment redirection scams last year, identifying that particular scheme as the most damaging to businesses and the “second most financially damaging type of scam overall in 2021”.

Online banking transactions require the recipient’s name, BSB and account number, but Rickard argues that “most banks only check those details”.

“They [banks] don’t have a red flag if there’s no match whatsoever between the name and where the money’s going,” Rickard said.

According to the SMH, banks in the Netherlands introduced a name check service in 2017, which reduced reported fraud by 81 per cent.

The big four banks have yet to commit to following suit, arguing that the New Payments Platform’s (NPP) PayID initiative effectively blocks scams. PayID is designed to be a “unique identifier” linking to a customer’s bank account to a mobile number, email address or ABN, designed to enable a secure facility for customers to “send and receive funds almost instantly”.

“Australian banks are working hard to protect customers against the growing threat of scams and encouraging an increased use of PayID is an important part of this work,” ABA chief Anna Bligh told the SMH.

However, Rickard argues that PayID’s “low adoption rate” is why further measures need to be implemented.

There are over 10 million registered PayIDs in Australia, the RBA head of payments policy Ellis Connolly revealed, but only 16 per cent of Osko payments were made through PayID.

“We’ve been hearing about [the NPP] without seeing the vast majority move across to it.

“So these scams are still happening, but technology is available to stop it,” Rickard said.

[Related: Cyber insurers are key to solving persistent ransomware threat]

newsletter
cyber daily subscribe
Be the first to hear the latest developments in the cyber industry.