Falling victim to fraud may soon be a thing of the past as Australian banks join forces to create a new multi-million dollar tool to crack down on scams.

On Tuesday, May 16, the Australian Banking Association (ABA) announced the new platform called  Fraud Reporting Exchange (FRX) which will allow the “reporting of scam payments in close to real-time, boosting the likelihood that funds can be frozen and returned to customers.”

The new FRX platform is set to be a total game changer for combating scams and protecting customer finances.

According to the Guardian, FRX allows banks to stop multiple fraudulent transactions near real-time, offers seamless information sharing among banks to ensure loss prevention, and helps scam victims recover as much money as possible.

“Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” ABA CEO Anna Bligh said.

“It means more and more scammers are going to hit a brick wall and adds to the arsenal of anti-scam initiatives underway.”

The move will no doubt come as good news for older Australians with previous reports from the ACCC indicating that people aged 65 and over have often reported the highest losses to scams, with losses increasing with age.

More than $86 million was set aside in the recent federal budget to create the new platform, with 17 banks, including Australia’s big four, already on board.

“Banks are now better placed to jointly identify funds which have been fraudulently transferred, which should improve their ability to prevent any further losses to a customer,” Bligh said.

“The sooner that banks know about a fraud, the sooner they can take swift action to try to halt the payment before it gets to the scammers.”

The announcement of the new anti-fraud platform comes two months after the head of Australia’s consumer watchdog demanded bank executives intensify their efforts in protecting customers from the recent surge in financial scams.

ACCC chair Gina Cass-Gottlieb said Aussies reported over $569 million in stolen funds to scams in 2022, however, she highlighted the sum was only 13 per cent of the actual figure.

“Financial institutions are in a unique position to help and more needs to be done to ensure banks are detecting and blocking scam transactions,” she said.

Scammers have considerably ramped up their efforts to steal from Australians through texts, calls, advertisements and investment scams. They are not only focusing on stealing finances but also obtaining customers’ records, including identity information.

In 2022, Scamwatch received 14,603 reports about bank impersonation scams, resulting in more than $20 million in losses.

“We are incredibly concerned about bank impersonation scams because they can be so convincing, they are very hard to detect,” ACCC deputy chair Catriona Lowe said.

“What’s equally worrying about this particular scam, is that it is emptying every last cent out of victims’ savings accounts. This causes both financial and emotional devastation.”

“We know of a man who lost over $500,000 after receiving a call from someone claiming to be from a major bank’s security department, wanting to know if a payment had been authorised.”

FRX is expected to be up and running by July 2023.