Banks have been given permission to work together to develop an industry standard for dealing with the ever-increasing avalanche of scams.
The Australian Banking Association (ABA) and its member banks will be able to jointly develop strategies to prevent, detect and disrupt scams affecting individual and small business customers following a conditional interim authorisation from the Australian Competition and Consumer Commission (ACCC).
ACCC deputy chair Catriona Lowe says only through collaboration will the banking industry be able to achieve any kind of protection against the increasing number of scams.
“A coordinated response across government, law enforcement and the private sector is essential to effectively combat scams that are evolving rapidly and with increasing sophistication,” she says.
The ABA requires this permission from the ACCC to avoid being accused of collusion on matters that don’t relate to scam security.
The authorisation includes strict measures to manage the risk of the banks coordinating on anything beyond scam prevention and customer redress.
Ms Lowe says: “We have acted quickly on this interim authorisation because the proliferation of scams is causing significant detriment to consumers and businesses alike, and the banking sector has a key role in combatting scams and recovering losses.”
The authorisation applies to all ABA member banks: AMP Bank, ANZ, Bank Australia, Bank of Queensland Limited, Bendigo and Adelaide Bank Limited, Citigroup, Commonwealth Bank of Australia, HSBC, ING Bank, J.P. Morgan Australia and New Zealand, Macquarie Bank, MUFG Bank, National Australia Bank, Rabobank Australia, Suncorp Bank and Westpac.
Ms Lowe says: “We have placed reporting conditions on the ABA to ensure we are informed of the progress of their discussions, including consultation with stakeholders …
“The ABA will be required to provide regular reports on any industry initiatives they propose, such as circumstances where customers would be reimbursed or entitled to remedies.”
The ACCC noted that the federal government recently announced a legislated cross-industry code would be introduced for banks, telcos, social media platforms and others.
The consultation comes as losses from scams reach record levels. ACCC data shows Australians lost a total of $3.1 billion to scams in 2022 – an 80 per cent increase over 2021.
“Australians lost more money to scams than ever before in 2022, but the true cost of scams is much more than a dollar figure as they also cause emotional distress to victims, their families and businesses,” Ms Lowe says.
“As scammers become increasingly sophisticated in their tactics, it is clear a coordinated response across government, law enforcement and the private sector is essential to combat scams more effectively.”
Will banks working together be more effective at preventing scams? Or is letting them collaborate a recipe for disaster? Let us know what you think in the comments section below.
Also read: Bank response to scam victim left family despondent, bewildered and out of pocket