The Australian Financial Complaints Authority (AFCA) has welcomed today’s announcement of a scams prevention accord by Australian banks.
“We have been calling for stronger action and for a consistent approach across the banking sector to prevent scams, and we welcome these positive steps announced today,” AFCA’s Chief Executive Officer and Chief Ombudsman, David Locke, said.
“When we talk about scams, we are really talking about serious organised crime, often conducted by international syndicates using sophisticated methods of deception and fraud. We are all being required to use digital banking, so the banks must ensure that their products and services are safe and that consumers are protected. Anyone can fall victim to these scams,” Mr Locke said.
“We witness first-hand the human cost of scams. As we continue to move to digital banking, it is imperative that customers can do so safely, and they are treated fairly when things go wrong”.
“AFCA is pleased to see work start on ‘Confirmation of Payee’ and a commitment to roll this out across the whole banking system. We have been urging all banks to address this as it will be an important protection for consumers and small businesses to ensure they are making payments to the right accounts.
Other initiatives such as greater sharing of real time intelligence, delays and friction in the banking system to frustrate fraud and restrictions on high-risk transfers are also welcome and they all can help in the fight against the scourge of scams.
Mr. Locke said, “AFCA is receiving about a 1,000 scam cases a month and behind each one of these cases is a story of shock, loss and trauma. The financial sums lost are lifechanging for many and the emotional, and psychological impact can be profound”.
“We also welcome the commitment of the Government to deliver tough new industry codes for banks, telcos and digital platforms, which will set clear, robust obligations to protect Australians. Enforceable standards will help lift the bar on scam prevention and remediation. They will also aid the work we do as an ombudsman service.”
“We look forward to ongoing collaboration with industry, regulators and Government to make Australia a place of last resort for scammers, rather than a destination of choice.”
AFCA received 6,048 scam complaints in the 2022-23 financial year, a 46% increase on the previous year.
In the first quarter of the new 2023-24 financial year, it received 2,856 scam-related complaints, up 57% from 1,819 in the previous three months and 125% higher than the same period a year earlier. The sums lost in these cases can exceed $1 million.
The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent help with financial disputes. AFCA is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation. Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.
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