Financial phishing scams, a prevalent form of bank scams in Australia, have plagued Australians for years, leading to significant financial and emotional distress. With the increasing reliance on digital platforms for banking, shopping, and communication, new avenues have opened up for scammers, making it imperative to understand the evolving nature of financial scams in Australia.

Recognising the severity of the issue, the ACCC has authorised the Australian Banking Association (ABA) and its members to form a united front against these financial scams in Australia. This article will explore the implications of this collaboration, shedding light on how it aims to prevent, detect, and disrupt scams.

Common types of financial scams in Australia

Over the years, Australians have encountered a variety of financial scams, each with its unique approach and deceitful tactics. Here are some of the most common types:

1. Investment Scams: These involve promises of high returns with little to no risk. Scammers may pose as portfolio managers, offering fake opportunities in shares, real estate, or commodities.
2. Banking and Credit Card Scams: Scammers may pose as bank representatives, asking for personal details under the guise of verifying accounts. They might also send fake bank emails prompting users to enter their login details on a fraudulent website.
3. Lottery and Competition Scams: Victims are told they've won a prize but must pay a fee or provide personal details to claim it.
4. Romance Scams: Scammers create fake profiles on dating sites or social media platforms, building emotional relationships with victims before asking for money, often under the pretence of a made-up emergency.
5. Identity Theft: This involves stealing personal information to impersonate someone, often leading to unauthorised financial transactions.
6. Cryptocurrency Scams: As digital currencies gain popularity, scams related to fake investments and fraudulent ICOs (Initial Coin Offerings) have surged.

According to the latest statistics from Scamwatch:

• Australians lost a record amount of more than $2 billion to scams in 2021.
• For perspective, in 2019, Australians reported losses of around $634 million to scams, showing a significant increase in just two years.
• Investment scams were the highest loss category in 2021, accounting for $701 million, followed by payment redirection scams ($227 million) and romance scams ($142 million).
• People aged 65 and over reported the highest losses, with losses steadily increasing with age. In 2021, reported losses by those aged 65 and above were over $28 million.
• There was a 60% reduction in losses from inheritance and unexpected money scams between 2020 and 2021, but losses from investment scams increased by 169% over the same period.

How financial scams have evolved

Historically, financial scams were executed through face-to-face interactions, letters, or over the phone. With the rise of the internet and digital platforms, the nature and scope of these scams have transformed dramatically. The advent of AI and machine learning has given scammers sophisticated tools to execute scams but has also empowered institutions to detect and counteract these threats more effectively.

• Pre-2000s: Scams were primarily offline, involving tactics like fake lotteries, pyramid schemes, and door-to-door sales scams.
• The 2000s: With the internet becoming mainstream, email scams, phishing attacks, and online investment scams began to emerge.
• The 2010s and Beyond: The proliferation of smartphones led to a rise in SMS-based scams. Cryptocurrency-related scams also emerged, with scammers taking advantage of the lack of understanding around this new form of currency.

The digital age has provided scammers a broader platform and more sophisticated tools. However, it has also equipped individuals and institutions with advanced means to detect, prevent, and combat these threats.

The ACCC Initiative

In response to the rising number of bank scams in Australia, the Australian Competition and Consumer Commission (ACCC) has taken a proactive step by granting the ABA and its member banks a conditional interim authorisation, which lasts for a period of six months but can be extended upon review. This move allows these entities to collaborate while ensuring they adhere to specific conditions set to protect consumers.

This move allows these entities to collaborate to prevent, detect, and disrupt scams that impact Australians. The ACCC's deputy chair, Catriona Lowe, emphasised the importance of a "coordinated response across government, law enforcement and the private sector" to effectively combat the rapidly evolving and increasingly sophisticated scams.

The ACCC also noted the federal government's intention to introduce a legislated cross-industry code for banks, telcos, social media platforms, and other sectors, further underscoring the importance of this initiative.

The ABA's Role

The ABA, representing major banks such as AMP Bank, ANZ, Bank Australia, Commonwealth Bank of Australia, HSBC, National Australia Bank, and Westpac, among others, is at the forefront of this collaborative effort against bank scams in Australia. An ABA spokesperson highlighted that banks have been diligently working on individual initiatives to protect Australians from scams. With the ACCC's authorisation, they can now focus on more collective initiatives, working alongside telcos, social media, and crypto platforms to halt scams at their source.

Before this collaborative effort, individual banks like the Commonwealth Bank of Australia and ANZ had launched their own anti-scam initiatives, which saw considerable success in educating the public and preventing scam incidents.

Banking Cyber Security: A Collaborative Approach

Leaders in the banking sector have long recognised the need for a unified approach to banking cyber security. CBA’s head of blockchain, Sophie Gilder, emphasised that "banks alone can't fix this problem." She advocated for industries to share data and collaborate more efficiently. Echoing this sentiment, NAB’s CEO Ross McEwan stressed the need for a 'Team Australia' approach across all industries to combat financial scams.

A significant step in this direction is the formation of the Fraud Reporting Exchange (FRX) by the Australian Financial Crimes Exchange (AFCX). Many Australian banks have already signed on to use this new digital platform, designed to respond in real time to fraudulent transactions.

Leaders in the banking sector are not just relying on traditional methods but are also leveraging technological advancements like AI-driven fraud detection systems and blockchain for enhanced transaction security.

Protecting your business against banks scams in Australia

As the banking sector rallies against financial scams in Australia, businesses must fortify their defences. Implementing robust banking cyber security solutions is paramount. ESET, a cybersecurity frontrunner, tailors solutions for businesses, guaranteeing formidable protection against threats. Their Identity and Data Protection and Complete Protection suites are designed to safeguard businesses from evolving cyber threats, including phishing scams.

Beyond implementing robust banking cyber security solutions, it's essential to train employees to recognise phishing attempts, ensure any software is regularly updated, and consider periodic cybersecurity audits to identify potential vulnerabilities.

Safeguards for banking cyber security

The alliance between the ACCC, ABA, and its member banks signifies a monumental leap in the battle against financial phishing scams in Australia. The general public plays a crucial role in this fight. By staying informed through resources like Scamwatch, using secure methods for online transactions, and regularly updating their knowledge on the latest scam tactics, individuals can significantly reduce their risk of falling victim.