Australian Treasury bond scam with realistic rates of return is the new fraud threat

Forget tall tales of Nigerian princes, industrialised scam businesses are now basing their frauds on seemingly legitimate, boring investments to get wary Australians to lower their guard.

Scammers are deliberately toning down their investment scams to make them more convincing.

Fraud prevention gurus at the nation’s largest financial institution, CommBank, have revealed that one of the most persuasive scams of recent times was “very difficult” for customers to identify because the touted investment returns were surprisingly realistic.

The ruse offered bonds with yields similar to legitimate government and commercial debt, backed by professional-looking prospectus documents.

To help combat the growing scam threat, CommBank on Monday announced it had added new artificial intelligence (AI) technology to its arsenal to detect a greater proportion of suspicious transactions.

Using machine learning techniques, the bank will monitor and compare keystrokes, mouse movements and typing patterns.

General manager group fraud James Roberts believes Commbank’s AI technology could make a “significant dent” in stopping fraud. Picture: Damian Shaw

General manager group fraud James Roberts said CommBank believed the AI technology could make a “really significant dent” in the level of criminal access to accounts.

The data would not be used for commercial purposes — only customer security, Mr Roberts said.

Commuters walk past an Commonwealth Bank branch in Sydney's CBD on June 07, 2022 in Sydney, Australia. Picture: Brendon Thorne

CommBank is also doubling the size of the team that focuses on recovering money lost by “vulnerable customers”.

The squad clawed back $32 million in its first year of operation.

CommBank wouldn’t say exactly how many more people were being added to the team.

Overall in 2021 the bank recovered more than $100m for customers. It wouldn’t say how much it was unable to recover.

PM Albanese has a ‘sensible plan to tackling scams. Picture: Lisa Maree Williams

Earlier this week, the Australian Competition and Consumer Commission estimated scam losses across 12 institutions at more than $2 billion last year.

Mr Roberts also said the bank believed the Albanese government’s plan for an “ecosystem-wide approach” to tackling scams was “sensible” because it would include technology platforms such as Google and Facebook, as well as telecommunications companies and payment products like PayPal.

To only apply pressure to banks to do more, as the UK had done, would not be as effective at addressing the problem, he said.

“It’s like a balloon – if you squeeze on one side of the balloon it bulges out the other side,” Mr Roberts said.

“My belief is that you need to squeeze at the same time on all sides to actually make the problem smaller.”