REPORT: One year on and ASIC report again reveals banks shirking responsibility when customers have been scammed
A new report published today from the Australian Securities and Investments Commission (ASIC) reveals a “shameful neglect of thousands of banking customers who have been scammed through no fault of their own and collectively lost millions of dollars”, says Consumer Action Law Centre CEO, Stephanie Tonkin.
The report, Anti-scam practices of banks outside the four major banks, is an analysis of 15 of the country’s smaller authorised deposit-taking institutions and their anti-scam activities from 1 July 2022- 30 September 2023.
It shows an overwhelming failure by these banks to implement effective anti-scam practices, leaving their customers vulnerable to crime. ASIC identified some improvements with the major 4 banks, but it is clear from ASIC’s findings that the piecemeal investment in anti-scam technology needs to substantially increase to protect banking customers across the board.
Even worse, customers of the reviewed banks foot the bill for 96% of the millions robbed from their accounts over the 2022-23 financial year, and when a customer complained to their bank, the share of loss reimbursed and/or compensated was 7%, falling to a paltry 2% for those who didn’t complain.
“The evidence is clear; the banking sector is not taking the scams crisis seriously enough and Government must stop delaying the bill they promised in spring and step in now with effective regulations to force them to act, substantially increase their investment in anti-scam technologies and protect their customers money,” Ms Tonkin said.
Ms Tonkin said she was shocked at how poorly the banks examined supported their customers when they turned to them for help. Government delays to introducing strong laws that incentivise the banks to protect their customers’ money have left Australians extremely vulnerable to scammers. She said the ‘microscopic’ levels of reimbursement for those who didn’t complain were an indictment of the way these banks treat scams. Customers are paying for bank failures.
“These statistics reveal that something is very wrong in Australian bank culture, that a person must complain to get their stolen money back or their bank does nothing. Why isn’t the Federal Government stepping in to make the banks take more responsibility?” Ms Tonkin said.
“A banks first job is to protect the customer’s funds. People put their trust in that institution and are devasted when they are robbed and no effective help, support or reimbursement is offered.”
The report found that the reviewed banks showed an immature approach to scam prevention, detection and response and that size doesn’t matter, with concerns including:
- significant variability in the maturity of scam strategies and governance,
- inconsistent and narrow approaches to determining liability, and
- lack of support for scam victims.
ENDS
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au
