Finance & Banking
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Fraud Management & Cybercrime
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Fraud Risk Management
Banks Shift Blame to Social Media, Telecoms While Scam Victims Pay the Price
If you’re the victim of a scam in Australia, the chances of being reimbursed for your stolen funds are low. In fact, the Australian Financial Complaints Authority, AFCA, ruled in favor of full reimbursement for victims in only 4.8% of its cases last year, highlighting the difficulty consumers face in disputing fraud-related losses with banks.
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While consumer groups push for stronger protections under the Scams Prevention Framework Bill, Australian banks have only recently implemented basic anti-scam measures – steps that many experts say should have been in place years ago. Meanwhile, banks have shifted the blame to social media and telecom companies, calling for greater accountability from tech platforms while downplaying their own delays in fraud prevention.
Delayed Response
In 2024, Australian banks introduced several fraud prevention measures, including confirmation of payee to verify recipients before transactions; slowing suspicious payments to help detect and block fraud; using anomaly detection with behavioral insights to flag potential scams; enhancing staff training on scam tactics and intervention; implementing caller verification for bank staff contacting customers; and issuing customer alerts about suspicious transactions.
These measures signal a stronger commitment to fraud prevention, but many say they should have been in place long ago.
“Australian banks have been late to the party when it comes to scam controls,” said Jason Costain, former head of fraud analytics and threat management at NatWest Group. “It is frankly immoral to ignore the plight of victims, but the proposed Australian scam legislation has been so heavily influenced by banks that they’ve largely overlooked scam victims.”
Other countries acted much earlier. The U.K. implemented confirmation of payee in 2019, completing 2.5 billion checks and preventing roughly 200 million pounds in fraud. Australian banks only adopted the measure last year. Similarly, U.K. banks introduced real-time scam warnings in 2018, while Australia’s major banks followed suit in 2023.
A 2023 report from the Australian Competition and Consumer Commission and the National Anti-Scam Centre shows Australians submitted 601,000 scam reports last year – and lost more than $2.74 billion to fraudsters.
Shifting Blame to Tech and Telecom Firms
Despite finally implementing stronger fraud controls, banks in Australia say social media and telecom companies should bear the burden. While involving these sectors in the fight against scams makes sense, banks must take more accountability, especially as platforms such as Meta – under pressure from U.S. President Trump – have scaled back fact-checking features on social posts.
“Getting these technology companies to reimburse for scam victim losses is going to be problematic now,” Costain said. “Under the new regime, do we really believe that we can knock on their door and ask for them to cough up victim refunds?”
Better late than never, some say. Banks pushing for stricter tech regulations may be justified, but it doesn’t erase their own failures in fraud prevention.