The world is currently in the midst of a scam epidemic, driven by the newfound ability for scammers to pose convincingly as other people and organisations.
Gone are the days of poorly spelt emails purportedly from foreign royals. Scammers are now able to use tools such as AI and fake websites to entrap even the most alert of people.
Banks in particular have been called upon repeatedly by consumer groups to implement anti-scam measures. In August, the Australian Competition and Consumer Commission (ACCC) authorised the Australian Banking Association (ABA) to work with its members to develop an industry standard to prevent, detect, and disrupt scams.
Recently, the ABA announced that its members have joined forces to launch a new Scam-Safe Accord to deliver a higher standard of protection for customers and put scammers out of business. The ABA includes all major banks (Westpac, NAB, ANZ, and the Commonwealth Bank) and other smaller commercial banks.
This Accord also involves the Customer Owned Banking Association (COBA) which is composed of mutual banks, credit unions, and building societies. The Accord is a comprehensive set of anti-scam measures across the entire industry.
“This Scam-Safe Accord is a new offensive in the war on scams. It reflects the banking sector’s unwavering commitment to safeguarding every Australian. It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams,” ABA CEO Anna Bligh said.
The Scam-Safe Accord centres around a substantial $100 million investment in a new confirmation of payee system, set to be adopted by all Australian banks. This system aims to cut down on scams by allowing people to confirm they are sending money to the right person.
With a whopping 15.4 billion transactions totaling $2.5 trillion in the banking sector each year, implementing a system across the entire industry is a big task. Work on the new system will kick off immediately, and it’s expected to be ready and in use by 2025.
“Recent data from banks shows that $600 million in stolen funds been returned to customers over the last year. To keep up this effort it is critical that government, banks, telcos, social media and crypto platforms work together as part of an ecosystem to stay one step ahead of sophisticated criminal gangs,” Bligh said.
There are a number of other measures that will be taken as well. Banks will prevent misuse of bank accounts via identity fraud by implementing biometric checks when opening new accounts. They will introduce additional warnings and payment delays to protect customers if their account makes a large payment to a new payee.
All ABA and COBA members will join the Australian Financial Crimes Exchange (AFCX) to be ready to use their scams intel to fight scams from mid-2024. They will also join together in the Fraud Reporting Exchange over 2024-25 to help customers recover money faster.