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Banks told to lift their game as scammers grab $550 million from customers

Business

Australia’s major banks were facing a major shake-up after the Australian Securities and Investments Commission said systems to defeat scams were weak and compensation was as low as 2 per cent of the total lost.

 

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ASIC said bank customers lost $550 million in the last financial year due to scams which affected about 31,700 people.

ASIC deputy chair Sarah Court said combatting scams was a critical task for all of corporate Australia, but in some cases, the bank’s response to a scam may have contributed to further distress for a customer.

The investigation found that reimbursement to customers was paid in only 11 per cent of cases and that banks also only detected and stopped scam payments in 13 per cent of cases.

Court said the report found that the overall approach to scams strategy and governance of Australia’s major banks was variable and overall “less mature than expected”.

The banks also had inconsistent and narrow approaches to determining liability and victims were not well supported by the banks.

“Bank customers are overwhelmingly the bearer of scam losses, accounting for 96 per cent of total scam losses across the banks

“While there were examples of emerging good practice, steps taken to help prevent customers fall victim to scams varied across the banks,” the report said.

The calls for a shake-up follow revelations earlier this week that $3.1 billion was lost in scams last financial year.

“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,” Court said.

“Banks need to consider the ways they respond to an engage with scam victims to reduce further distress and help them manage the situation.”

 

 

 

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