ASIC report finds big four banks not doing enough to stop scams

Australia’s big four banks have come under fire for failing to stop customers losing hundreds of millions of dollars to scammers. See what else the scathing report revealed.

Australia's four big banks Commonwealth, Westpac, NAB, ANZ have been slammed by ASIC.

The corporate regulator has slammed the big four banks for failing to combat scams against their customers, saying they need to do more to tackle Australia’s multibillion-dollar fraud epidemic.

In a report released on Thursday, the Australian Securities and Investments Commission said that the big four – ANZ, Commonwealth Bank, NAB and Westpac – detected and stopped only 13 per cent of the payments their customers made to scammers.

Only about 11 per cent of victims received compensation from their bank and when banks did pay they shelled out between 2 per cent and 5 per cent of the money lost, ASIC said.

ASIC said the systems banks had in place to detect and deal with scams were “less mature than we expected”, with just one of the big four having a company-wide strategy in place.

Deputy chair Sarah Court said the banks have poured resources into their anti-scam efforts over the past few years.

“However, the increasing prominence of scams means that there is still more to be done,” she said.

ANZ has be slammed by ASCI in a new report. Picture: Britta Campion / The Australian

Commonwealth Bank has also come under fire. Picture: NCA NewsWire/ David Crosling

Australians lost a record $3bn to scams in 2022, up 80 per cent from the previous year, according to new figures released by the Australian Competition and Consumer Commission (ACCC) this week.

The surge in scams has prompted consumer groups to call for banks to be held responsible for refunding victims.

Many UK banks are already signed up to an industry code requiring them to reimburse most victims of scams, and a blanket rule forcing refunds is proposed by British authorities.

Australian banks oppose the move.

In its report, ASIC said that between July 1, 2021 and June 30 last year, customers of the big four banks transferred $845m to scammers.

“Of this, around $109 million in payments were detected and stopped by the banks (approximately 13 per cent of scam payments),” ASIC said.

ASIC said that between July 1, 2021 and June 30 last year, customers of the big four banks transferred $845m to scammers. Picture: NCA NewsWire / Morgan Sette

ASIC said in that time the banks paid just $21m in reimbursement and compensation to scam victims. Picture: NCA NewsWire / Morgan Sette

However, some banks detected as few as 5 per cent of scam transactions, the regulator said.

And it found that over the same period, the banks paid just $21m in reimbursement and compensation to scam victims.

ASIC said that when scams were detected, three of the four banks had not “kept pace with the increasing volume and sophistication of scams” by putting enough resources into the area.

As a result, victims suffered from delays in attempting to reverse transactions, making it more likely the account to which the money was sent had been drained of funds.

“Our review found there were inconsistent experiences and outcomes for customers who were

the victim of a scam, and in some cases a bank’s response may contribute to further distress for a customer,” Ms Court said.

“Banks need to reconsider the ways they respond to and engage with scam victims to reduce further distress and help them better manage the situation.”

Originally published as ASIC report finds big four banks not doing enough to stop scams