ASIC has released a damning report on the anti-scam practices of Australia’s non-major banks.

ASIC’s new report - Anti-scam practices of banks outside the four major banks - says the 15 highlighted banks exhibit a range of immature scam prevention practices, which often leave customers to bear the brunt of scam losses.

The report reveals substantial variability in the maturity of the anti-scam strategies among the banks. 

One of the more troubling findings is that only a third of the reviewed banks have an organisation-wide scam strategy. 

This lack of a cohesive approach is further exacerbated by the inconsistent and narrow methods used to determine customer liability and the inadequate support provided to scam victims.

ASIC Deputy Chair Sarah Court called for an urgent, coordinated industry-wide response.

“Like the four major banks we reported on last year, the 15 banks in this latest report also demonstrated a less mature approach to scams strategy and governance than we expected,” Court said. 

She said that while Australians are reportedly becoming more adept at avoiding scams, ongoing focus from both the industry and regulators is crucial to sustaining this trend.

The report detailed various instances where banks failed to protect their customers effectively. 

In one case, a customer lost $28,500 to a scam and was forced to contact their bank 11 times before being told they were fully liable for the lost money. 

Another case involved a bank failing to identify a customer as a victim of identity theft, resulting in further fraudulent transactions months later. 

ASIC’s findings indicate that during the 2022-2023 financial year, customers of the 15 reviewed banks bore 96 per cent of the total scam losses, with banks detecting and stopping only 19 per cent of scam transactions by value. 

Just 2 per cent of scam victims were reimbursed if they did not file a complaint, while 7 per cent were reimbursed if they did complain. 

This contrasts with an overall reduction in scam losses reported by the Australian Competition and Consumer Commission (ACCC), which has noted a 13 per cent decrease in total losses despite an 18.5 per cent rise in the number of scams reported.

Consumer advocates have criticised the banks for these failures. 

“These statistics reveal that something is very wrong in Australian bank culture, that a person must complain to get their stolen money back or their bank does nothing,” said Stephanie Tonkin, Chief Executive of the Consumer Action Law Centre.

She urged the federal government to accelerate the implementation of the proposed Scams Code Framework, designed to address these issues more effectively.

The Australian Banking Association (ABA), however, cautioned against overreacting to the report's findings. 

ABA Chief Executive Anna Bligh pointed out that the data used for the report was over a year old and does not reflect the recent improvements in anti-scam measures by the banks. 

The 15 entities that ASIC reviewed as part of the report are:  

  • AMP Bank Limited  
  • Bank Australia Limited  
  • Bank of Sydney Ltd  
  • Bendigo and Adelaide Bank Limited  
  • Beyond Bank Australia Limited  
  • Credit Union Australia Ltd  
  • Heritage and People’s Choice Limited  
  • ING Bank (Australia) Limited  
  • Macquarie Bank Limited  
  • Newcastle Greater Mutual Group Ltd  
  • Norfina Limited (trading as Suncorp Bank)  
  • PayPal Australia Pty Limited  
  • Rabobank Australia Limited  
  • Teachers Mutual Bank Limited  
  • Wise Australia Pty Ltd  

 

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