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As banks unite to stop scams, seniors group says more is needed

The banking industry's Scam-Safe Accord aims to "put scammers out of business" through six coordinated initiatives, including name and biometric checks. It's a good first step for protecting older Australians, who are disproportionately affected by scams, an advocacy group says.

Australians can expect more security checks when they transfer money, as the banking industry unveils a new pact aimed at fighting a scam “scourge” that cost consumers $3 billion last year, with retirees the worst hit. An advocacy group for older Australians called it a good first step but said more must be done.

The Australian Banking Association (ABA) and the Customer Owned Banking Association (COBA) on Friday announced the Scam-Safe Accord, which will see Australia’s mutual banks, building societies, credit unions and commercial banks implement a comprehensive set of anti-scam measures and “put scammers out of business in Australia”.

The accord is the result of the Australian Competition and Consumer Commission’s August decision authorising ABA banks to work together to develop scam-fighting initiatives, in light of statistics showing Australians lost $3.1 billion to scams in 2022 – a startling 80 per cent increase from 2021. Australians aged 65 and over are the cohort most vulnerable to scams.

  • ABA chief executive Anna Bligh called the accord a “new offensive in the war on scams”, and COBA CEO Mike Lawrence said it was a “significant step forward in the industry’s commitment to fighting scams”.

    “It doesn’t matter if someone banks with a regional mutual bank or the largest bank in the country – customers can be confident their bank is working hard to protect their money,” Lawrence said.

    ‘Disrupt, detect and respond’

    The centrepiece of the accord’s six initiatives, which aim to “disrupt, detect and respond to” scam threats, will see the industry invest $100 million in an industrywide confirmation-of-payee system to ensure the money that people transfer goes where it’s intended. Banks will also expand their adoption of technology and controls to prevent the misuse of bank accounts through identity fraud.

    Major banks will be required to use at least one biometric check for new individuals opening online accounts by end-2024. And customers sending money to a new payee or raising payment limits “can expect more questions, warnings and delays from their bank to prevent them from falling victim for a scam”, the groups said.

    Banks will also expand their intelligence sharing, with all ABA and COBA members to join the Australian Financial Crimes Exchange and the recently launched Fraud Reporting Exchange.

    Banks have also agreed to limit payments to high-risk channels, such as some cryptocurrency platforms, when they identify scammers moving funds out of the country. And they’ll implement an anti-scams strategy to enhance oversight of their detection and response efforts.

    Still ‘critical gaps’ for older Australians

    The announcement drew support from the Council on the Ageing (COTA), the leading advocacy organisation for older Australians, a demographic disproportionately affected by scams.

    “It’s no secret that too many Australians are being scammed too often, and older Australians often find themselves as victims,” COTA Australia chief executive Patricia Sparrow (pictured) said. “Today’s actions to address this serious issue are welcomed and crucial.”

    But “critical gaps” remain, she added, citing the need for consumer protection legislation to ensure banks protect financial scam victims the same way they do fraud victims.

    And while the Scam-Safe Accord’s initiatives represent a “good step forward”, Sparrow said, “older Australians continue to tell us they want the ability to impose a delay on their own transfers, to give themselves an additional layer of control and protection against scams”.

    COTA Australia said it welcomed the introduction of biometric checks, but Sparrow urged state and territory governments to set a timeline for including the 2.1 million Australians who currently can’t use Digital ID services.

    “We need to ensure everyone, including many older Australians who are unable to use Digital ID Services for a number of reasons, gets equitable access to the safeguards.”

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