Westpac cautions against scam reforms as losses flatline in Australia

Australia is one of the most successful countries combating scams and fraud, according to new analysis commissioned by Westpac.

Westpac says beware of making banks solely responsible for scam losses after the UK experience. Picture: Britta Campion / The Australian

Australia is among the most successful countries in the world combating scams and fraud, according to analysis from consulting firm BDO who said attempting to hold banks solely responsible for losses puts the trend at risk.

Comparing the losses of Australia with those of the United Kingdom, Canada, and the US, BDO found Australia was now seeing a plateau of scams and fraud.

This is compared to continued rises in other markets.

BDO found Australia’s scam losses were also trailing those in other markets, some of which have already introduced measures to see consumers reimbursed.

This includes the UK, where losses are almost double those of Australia.

However, BDO found the kinds of scams and frauds affecting consumers across these four countries differed greatly, with Australians particularly vulnerable to investment scams and fraud.

BDO forensic services partner Conor McGarrity said it was tough to compare across markets, but it was clear attempts to address scams and fraud in some countries weren’t achieving the desired result.

Mr McGarrity said the UK was a key example, with laws first introduced in 2019 to mandate reimbursements for scams and again amended in November last year.

“It may not be reversing the growth of scams in that jurisdiction,“ he said.

BDO forensic services partner Conor McGarrity.

Mr McGarrity said criminal groups were clearly targeting certain countries with certain forms of scams and frauds.

“Geographic boundaries mean nothing to them, they’ll operate here they can find the weakest link and exploit those jurisdictions,” he said.

The BDO partner and former criminal investigator said scammers targeting Australians had recently shifted their approach, after action from the telco sector.

“This is the first time we’ve observed emails overtaking text messages as the reported delivery method,” Mr McGarrity said.

Westpac, which commissioned the BDO research, pointed to the findings as proof Australia’s latest efforts to fight scams and fraud were working.

The bank has rolled out several pieces of technology to fight scams and fraud, including systems allowing customers to verify transactions and determine a mismatch between new payee details and the bank’s records.

Westpac has also put blocks on payments to cryptocurrency exchanges, a key method scammers use to get cash defrauded from Australians out of reach of the banking system.

Westpac customer and corporate services group executive Carolyn McCann said BDO’s analysis showed how a combined focus from the banking sector was key to stopping the financial crime.

“To maintain this momentum and ensure Australians are protected, we need to make our country the hardest place for scammers to operate in,” she said.

“This can only be achieved if all players in the ecosystem step up and do their part.”

Westpac group executive, customer and corporate relations, Carolyn McCann. Picture: NewsWire / Martin Ollman

The banking sector has agreed to a Scam Prevention Framework, which will see it develop joint tools that many institutions can use to monitor and block scam transactions.

But Ms McCann said digital platforms also had to “take action and stop scammers from using their products to target unsuspecting Australians”.

Westpac has repeatedly written to Meta highlighting scams and fraud.

As part of its submission to consultation on new anti-scam laws the Australian Banking Association highlighted how its attempts to get Meta to take down pages on Facebook used by scammers was blocked by the platform.

Meta only removed the pages after The Australian raised the matter.

“More than half of all scams are originating on these platforms and they need to be stopped,” Ms McCann said.

Westpac has also called for a number of changes to the proposed anti-scams laws including clarifying liability between banks, telcos, and social media companies under dispute resolution frameworks envisaged by the reforms.

Originally published as Westpac cautions against scam reforms as losses flatline in Australia