Consumer watchdog should name banks most vulnerable to scammers

Increasing numbers of Australians are being cold-called by fraudsters who warn them their bank accounts are compromised and then con them into transferring money into new accounts, allegedly opened in their names.

More than 8000 Australians have been bilked by bank impersonation scammers, who siphoned off some $10 million from small accounts so far this year, according to reports made by the public to the Australian Competition and Consumer Commission’s Scamwatch website.

But Australia’s consumer watchdog refuses to disclose which banks and customers have been most affected.

The ACCC has repeatedly rejected requests to identify the banks whose customers have been falling victim to impersonation scams, instead redacting the names of the institutions from the released data. In response to a freedom of information request, the ACCC argued that disclosing the information could make it harder for its National Anti-Scam Centre to obtain confidential information.

“I have taken account of the interest in public administration and transparency, and the interests of the third parties [banks] in the document requested,” the FOI decision said. “I have given more weight to the fact that this material has been provided on a voluntary basis, and that disclosure is likely to prejudice the ability of the National Anti-Scam Centre to obtain similar information on a voluntary basis in the future. The public interest in having the functions of the National Anti-Scam Centre continue to perform its functions is important.”

The partially censored data suggests fraudsters find certain banks easier targets. Nearly 3000 customers of one unnamed Australian bank have reported bank impersonation scams this year. In contrast, several banks have remained impregnable, with customers not losing a single cent to scammers masquerading as their workers.

Such small-scale confidence tricksters are part of a huge fraud industry in which Australians have lost more than $3.1 billion to scams, with the digital nature of the criminal operations, often traversing borders and legal jurisdictions, making the problem particularly challenging for authorities. Many of the victims of these scams have lost considerable amounts of money – their life savings, in some instances – and it is bank customers who are overwhelmingly left to pick up the bill for scam losses, with very few being compensated. Data shows of the more than $500 million lost in scams by Australians through the big four banks, only $21 million was paid in compensation. The British parliament last year passed legislation that makes UK banks legally liable to reimburse customers within five days if they are victims of scams on their platforms.

Australia is still baulking at going down a similar path. It is passing strange that the ACCC should see fit not to reveal which banks are most vulnerable to scams.

The consumer watchdog believes keeping the identity of banks secret will protect its ability to investigate. But in reality it is prioritising banks over consumers. It is a public service to reveal which banks better protect customers’ interests, especially as the customers, not the institutions, currently bear the brunt of the losses.

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