In the digital age, many of us are increasingly embracing the convenience of online banking and transactions. However, this shift has also exposed many to the dark side of the internet: bank scams.
Australia, it seems, has reportedly become a ‘honeypot’ for scammers, with losses reaching a staggering $2.74 billion in a single year. This has not only put individual savings at risk but has also tarnished the country’s reputation on the global stage, with the world taking note of this vulnerability to these wicked activities.
The real people behind the growing statistics of scam victims
The plight of Danny McIver, a Vietnam War veteran, is a heart-wrenching example of the devastating impact of bank scams. After losing his son and daughter, McIver’s life savings of $70,000 – meant to be a life insurance payout – were wiped out by scammers.
The 76-year-old recalled how he was victimised by a Microsoft impersonation scam, which left him with fraudulent bank transfers.
‘It broke my heart. And I have not been the same since the scam because it has just made my health just so much worse. Every day has been a real grind and this is on my mind 24 hours a day,’ he told news.com.au.
‘I just can’t believe that Bendigo (Bank) took nearly two hours to discover that funds were being taken out of my bank four times. I thought the flags would have been raised very, very early.’
Harriet Spring is also one of the real people behind the statistics. She lost a $1.6 million inheritance to scammers after she was allegedly ‘groomed’ by a man claiming to be from a well-known Australian bank. She said he offered her a term deposit.
Because of her experience, Spring, along with other victims and consumer groups, is calling for a more robust approach that holds banks accountable and ensures fair outcomes for scam victims.
‘The governments and banks have basically orchestrated the greatest consumer protection failure in Australian history,’ she said.
‘Due to systematic failures of governments and banks and introducing more major players like telco and social media conglomerates, they are stacking the cards even further against consumers and the likelihood of someone getting their money back is getting further and further away.’
She also opined that ‘banks have not been proven to be in any way on consumers’ sides’ and ‘have made billions in profits for last 20 years at the expense of consumer protection.’
Nationals MP Anne Webster was not spared from falling victim to scams herself. She said she was scammed $9,000 on her credit card after attempting to book on a website she thought was the Hyatt.
Ms Webster said the scam left her ‘incredibly vulnerable’ and that she was only refunded by the bank after she told them that she would talk about her scam experience in parliament.
While she had been refunded, she said the bank’s response was not right because ‘not everybody can effectively put pressure on like that.’
The People Before Profit campaign
With the growing number of Australians being scammed, news.com.au has launched the People Before Profit campaign, urging the federal government to follow the UK’s lead where the legislation now mandates banks to compensate scam victims within five business days, except in cases of gross negligence.
This move has not only provided relief to victims but has also seen a decrease in scam losses, as banks have a vested interest in preventing scams.
The government’s approach to tackling scams
In Australia, the government claims that its Scam Prevention Framework is on track to tackle the billion-dollar issue.
However, the proposed Scam Prevention Framework, which includes hefty fines of up to $50 million for banks, social media giants, and telcos that fail to prevent scams, has been criticised for not going far enough.
Victims, consumer groups, and politicians alike have voiced their concerns, pointing out the absence of explicit compensation for scam victims within the framework.
The financial stakes are high, with the big four Australian banks raking in a combined $30.7 billion in profits in the 2024 financial year. Yet, despite their substantial earnings, banks have been reportedly reluctant to offer refunds to scam victims without a fight.
‘We could introduce a world-leading framework that provides the highest incentives [in the] industry to invest in scam prevention and reimburse customers when they get it wrong,’ said Consumer Action Law Centre chief executive Stephanie Tonkin.
‘We are disappointed this approach is not on the table. But the status quo of industry inaction must urgently change,’ she expressed.
‘If we take the Government’s Scam Prevention Framework approach, the unacceptable burden on scam victims to fight and prove their case against cashed-up corporations must be removed. Government should introduce a presumption – an automatic right of compensation – if a business fails to meet its obligations under the framework.’
Ms Tonkin added that the country’s inaction on scams has made it ‘the world’s honeypot for scammers.’
The calls for stronger consumer protection
The issue has reached the political arena. Aside from Ms Webster, Greens senator Nick McKim is also advocating for stronger consumer protections and a reimbursement model.
‘Labor’s proposed framework is weak and ineffective. It’s designed to protect bank profits rather than benefit consumers,’ said Senator McKim.
‘The big banks made almost $32 billion in profit last year – they can afford to refund people and then seek to recover costs from other companies like telcos and social media platforms.’
However, Assistant Treasurer Stephen Jones has claimed that the government is working on the ‘toughest legislation in the world’ to tackle scams by ensuring that ‘consumers get swift access to justice and that we have all the right incentives in this case to protect their interests.’
‘It’s always a lot better to prevent a crime happening than to rely on compensation. So we think we’ve got the best approach anywhere in the world around prevention and putting a legal obligation that doesn’t currently exist on banks, telecommunications companies and social media platforms to keep their customers safe,’ he elaborated.
At YourLifeChoices, we understand the importance of safeguarding your hard-earned savings. We encourage our readers to stay informed about the latest developments in scam prevention and to take proactive steps to protect themselves online.
Share your thoughts and experiences with bank scams in the comments below. Have you or someone you know been affected? What measures do you think should be taken to combat this growing problem? Your insights could help shape the conversation and drive change to ensure that Australians can bank with confidence, free from the fear of scams.
Also read: Most Aussie banks are lagging in the battle against email and phishing scams, new research finds.
