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Banks launch ‘new offensive in the war on scams’

A fraud protection endeavour has been launched, including a $100 million investment to create a new confirmation of payee system.

The banking industry has joined together to launch the new Safe-Scam Accord, which aims to deliver a “higher standard of protection for customers and put scammers out of business in Australia”.

On Friday (24 November), the Australian Banking Association (ABA) and Customer Owned Banking Association (COBA) revealed the accord – held between Australia’s community-owned banks, building societies, credit unions, and commercial banks – will bring in several comprehensive anti-scam measures across the industry.

At the core of the accord is a $100-million investment to bring in a new confirmation of payee system across all Australian banks.

The new system will reportedly help reduce scams by ensuring people can confirm they are transferring money to the person they intend to.

The design of the new system has already started, with the expectation that it will be built and rolled out over 2024 and 2025.

Alongside the new payee system, the Scam-Safe Accord also includes an expansion of intelligence sharing across the sector, with all banks acting on scams intelligence from the Australian Financial Crimes Exchange by mid-2024 and joining the fraud reporting exchange.

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The addition will mean that critical information about scam transactions is shared across the sector, increasing the chances of preventing scams and recovering stolen funds.

The intelligence expansion is part of the six primary priorities that the Scam-Safe Accord has set out for the industry, which are:

  • Banks will deliver an industry-wide confirmation of payee solution to customers.
  • Banks will take action to prevent misuse of bank accounts via identity fraud.
  • Banks will introduce warnings and payment delays to protect customers.
  • Banks will invest in a major expansion of intelligence sharing across the sector.
  • Banks will limit payments to high-risk channels to protect customers.
  • Banks will implement an anti-scams strategy.

A ‘new offensive in the war on scams’

ABA chief executive officer Anna Bligh stated that the accord was a “new offensive in the war on scams”.

Ms Bligh commented: “It reflects the banking sector’s unwavering commitment to safeguarding every Australian. It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams…

“Recent data from banks shows that $600 million in stolen funds have been returned to customers over the last year. To keep up this effort, it is critical that government, banks, telcos, social media, and crypto platforms work together as part of an ecosystem to stay one step ahead of sophisticated criminal gangs,” Ms Bligh added.

Mike Lawrence, CEO of COBA, agreed, stating: “The initiatives we launch today are a significant step forward and demonstrate the banking industry’s commitment to fight scams.

“It doesn’t matter if someone banks with a regional mutual bank or the largest bank in the country, customers can be confident their bank is working hard to protect their money.”

Stephen Jones, the Minister for Financial Services and Assistant Treasurer, welcomed the launch of the Scam-Safe Accord, labelling it as “another important step in Australia’s united battle against the scammer scourge”.

Mr Jones added that the government was looking forward to continuous engagement between the banking sector and the government to protect Australians from scams.

He stated: “Australians finally have a government that is fighting back against scams after being left to fend for themselves for years.

“We are glad to see the banking industry taking their own proactive steps.

“Because of the work being done across government and industry, Australians are more aware and more likely to report scam activity.”

Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson, also welcomed the move, stating that the pledge would “go a long way to stopping scammers being able to divert invoice payments by simply and silently changing a bank account number”.

“When a criminal impersonates your business, it not only costs you and your customers money but can damage your brand and lead to a loss of consumer trust and confidence and the ability to operate. Too often, it can be an enterprise-ending event for a small business,” he said.

[Related: Banking industry holds ‘huge role’ in fighting scams]

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