Is this really my bank calling? Westpac moves to stop impersonation scams

Westpac customers will be able to speak to staff at their bank via its banking app using a verified call, in a move the company hopes will help reduce the hundreds of millions of dollars Australians are losing to banking scams each year.

In a bid to block ever-more-sophisticated impersonation scams, Westpac will on Tuesday roll out a new security product in partnership with telco Optus that allows customers to receive Westpac-branded calls via the bank’s app, which is used by 3.6 million people each month.

Australians lost around $3 billion to scams last year, with impersonation scams causing a lot of damage.Credit: Istock

The calls, which will be verified by Optus, will also show the reason for the bank getting in touch with a customer.

“This will help to provide customers with the confidence and added security to help beat scammers and know that they really are talking to their bank,” Westpac chief executive Peter King said.

The verification systems included in Westpac’s SafeCall product, along with the move to disclose the reasons for the call, are an Australian first. But they come as local banks face growing criticism about their response to scams.

Bank scammers typically target customers by impersonating staff from the bank’s fraud team and use information about the customer’s accounts to manipulate them into moving their funds to another account.

Australians lost around $3 billion to scams last year, with impersonation scams a significant part of that.

According to Westpac, impersonation scams (including those related to banks) account for 11 per cent of all reported scam types. Meanwhile, ASIC estimated in 2023 that more than 31,000 banking customers had between them lost $558 million.

Australian banks do not generally reimburse customers who have handed over their details to scammers, even if they have been the victim of a sophisticated ruse. ASIC found banks refund between 2 and 5 per cent of scam losses and between them stopped 13 per cent of scam payments.

From October, in Britain, banks will be responsible for reimbursing scam-related losses, unless consumers have been grossly negligent or found acting fraudulently. However, many UK banks have already started reimbursing customers for scam losses.

Consumer advocates have welcomed Westpac’s efforts but said the improved technology changes need to be accompanied by a change in attitude from banks.

“This is exactly what all our banks should be doing, using advanced technology to stop scammers at source, ensuring customers’ life savings are safe,” Consumer Action Law Centre chief executive Stephanie Tonkin said.

“Instead, we continue to hear the banks and their representatives using victim blaming narratives like ‘moral hazard’ and ‘gullibility’ and that ‘banks shouldn’t have to pay’ (for failing to keep customers’ money safe).

These are excuses for the industry’s slow introduction of anti-scam technology - we don’t expect to see confirmation of payee technology being rolled out until the end of 2025 despite the ACCC recommending it to the banks in early 2022,” Tonkin said.

However, the Australian Banking Association has argued that the UK reimbursement laws have made it a honeypot for scammers. It has also suggested that telcos and social media companies share responsibility for scams.

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