In April 2023, the Australian Securities and Investments Commission (ASIC) released a report on what the big four banks were doing to protect customers from scams, and what they did after customers were scammed.
The answer in both cases was nothing much. The big banks (ANZ, CBA, NAB and Westpac) as a whole had put a stop to a mere 13% of scam payments over the review period, and had provided reimbursement to customers for the money stolen by scammers in a paltry 2–5% of cases.
More broadly, customers of the big four banks (rather than the banks themselves) were nearly always the bearer of scam losses, accounting for 96% of total scam losses across the sector.
Smaller banks also shirking their duties
A recently released ASIC report focusing on 15 smaller banks delivers much the same troubling news. In 96% of the cases where a scam occurred, customers suffered the losses. And, as with the big four, reimbursements were few and far between.
When customers did put the time and effort into complaining, only seven percent were reimbursed
Only two percent of scam victims who didn't lodge a complaint with the bank got their money bank. When customers did put the time and effort into complaining, only seven percent were reimbursed.
Almost all the money lost to scams by customers of the 15 banks in 2022–23 ($232 million in total) stayed with the scammers, which may explain why the scam industry has exploded in recent years.
Government must step in
The recent ASIC report reveals a wide variety of approaches to scam prevention and scam victim support across the reviewed smaller banks – all of which fell woefully short of protecting customers.
Banks tended to take different approaches to determining their liability, and to absolve themselves of responsibility when it came to helping their customers.
Consumer Action Law Centre CEO Stephanie Tonkin says the research shows a "shameful neglect of thousands of banking customers who have been scammed through no fault of their own and collectively lost millions of dollars".
It's clear that banks won't step up unless they're forced to by law
CHOICE senior campaigns and policy adviser Alex Soderlund
"The evidence is clear, the banking sector is not taking the scams crisis seriously enough and government must stop delaying the bill they promised in spring and step in now with effective regulations to force them to act, substantially increase their investment in anti-scam technologies and protect their customers' money," Tonkin says.
CHOICE senior campaigns and policy adviser Alex Soderlund agrees, saying "with banks stopping only a small percentage of scams and refusing to reimburse the vast majority of scam losses, it's clear that they won't step up unless they're forced to by law".
"Customers who have trusted the banks with their money deserve the best scam protections available, and a simple, fast pathway for dispute resolution when those protections fail."
We're on your side
In more than 60 years of making a difference for Australian consumers, we've never taken ads or sponsorship.
Instead we're funded by members who value expert reviews and independent product testing.
With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
You know without hesitation what's safe for you and your family.
And you'll never be alone when something goes wrong or a business treats you unfairly.
Learn more about CHOICE membership today
Stock images: Getty, unless otherwise stated.
