NAB hits out at telcos, social media over scams as it stops $48.5m going to potential scammers

National Australia Bank says it prevented close to $50m of customer funds going to potential scammers in the final two months of last year.

Telstra, Optus and Meta have all pushed back against a proposed scams prevention framework. Picture: iStock

National Australia Bank has hit out at social media platforms and telecommunications companies for not “owning their accountability” in preventing scams, as the lender revealed it stopped close to $50m of customer funds going to potential scammers in the final two months of last year.

“Almost 100 per cent of scams originate on an online platform or via telecommunications carrier. Those industries have a critical role to play in stopping criminal content from getting in front of victims in the first place,” NAB’s executive for group investigations, Chris Sheehan, told The Australian.

“Our role as banks is to try and protect customers from making a payment that’s going to go to a scammer. We’ve done a lot and there’s more to do, and we’re going to do it … (but) I’m disappointed in what we’re hearing from telcos and the digital platforms at the moment … They have an accountability here and they need to own that accountability,” he said.

Alerts warning payments could be going to potential scammers saved NAB customers $48.5m in the final two months of last year, the bank revealed on Friday. NAB customers abandoned $26m worth of payments in December alone, with a further $22.5m saved from potential scams in November.

Investment, romance, invoice and goods and services scams are all on NAB’s hit list of alert targets, with the bank employing a range of tactics, including behavioural technology to tell if a payment might be a scam.

NAB stopped close to $50m of customer funds going to potential scammers in the final two months of last year. Picture: Getty Images

“It’s a combination of the characteristics of the payment itself and whether it’s in the pattern of the customers’ normal spending, but also the behaviour of the person making the payment,” Mr Sheehan said.

“We can pick up signals that might look like the customer’s confused, or that maybe they’re being coerced into making the payment by the way they behave with their device when they’re making a payment. So we bring all that together and use all of those different signals that we get to trigger an alert,” he added.

But he warned telcos and social media companies needed to do their part in protecting Australians from scammers.

“Banks have no visibility to a criminal’s interactions with someone via a text message, a phone call, social media messages or a dodgy website until someone attempts to transfer money or make a payment,” Mr Sheehan said. Australians lost $2.7bn to scammers in 2023, with more than 601,000 reports made, according to the latest analysis by the competition regulator. That reflected an 18.5 per cent jump in scam reports compared to the year prior, though the overall amount lost was lower than the year prior.

The government’s new Scams Prevention Framework aims to impose tougher obligations on banks, telcos and social media companies to prevent scams and, if they fail to comply, fines of up to $50m can be applied.

Banks have been heavily criticised by consumer advocates for not doing enough to protect customers from scammers and for failing to compensate victims of scams. But the banks put much of the blame on others, such as Meta. Westpac recently said digital platforms had to “take action and stop scammers from using their ­products to target unsuspecting Australians”.

In submissions to the government, Optus, Telstra and Meta all confirmed their intent to prevent scams but pushed back against the obligations proposed in the framework.

Meta, in its submission, said it had “significant concerns”, warning the proposed dispute resolution scheme could “make Australia an even more attractive target for scammers”.

Telstra said a “punitive and prescriptive regime” was not required for the telco to take scams seriously.

As government and industry clash over the new framework, a portion of scams – those related to invoices or payment requests being intercepted by scammers – will be targeted by a national name-matching service to be rolled out in coming months.

The centralised system, already built and currently in the testing phase, was flagged to be introduced by banks and other financial institutions in 2025, but no firm timing has been officially confirmed. May is now the target date for a broad rollout, well placed industry sources told The Australian.

This will see Australia become the fourth global market to introduce a name-matching service across banks in an attempt to clamp down on scams and reduce fat-finger errors.

The new confirmation-of-payee service will operate as a traffic light system, cross-checking account details, branch number and account name entered before a payment is made.

Commonwealth Bank and Westpac already operate their own payee confirmation systems.

Consumer advocates said the name-matching system would stop losses such as false billing scams, but would do nothing to stop bank impersonation scams.

“There’s so many different ways that scammers are innovating and tricking people into parting with their money, or socially engineering people to make transfers of money. Confirmation of payee will be important for some, but it won’t cover the field in terms of scams prevention,” Consumer Action Law Centre chief executive Stephanie Tonkin told The Australian.

Scam complaints to the financial complaints ombudsman, meanwhile, surged in the 12 months to the end of June, to just under 11,000, up a staggering 81 per cent on the prior year, as victims and banks clashed over who should foot the bill for the losses.

A recent ruling against HSBC – and subsequent legal action taken against the bank by the corporate regulator – puts the pressure back on banks to do more to recover losses.

Originally published as NAB hits out at telcos, social media over scams as it stops $48.5m going to potential scammers