Home / Regulation / With $550 million lost to scammers in FY22, big-four customers got less than 5% back

Nearly 32,000 customers of Australia's four major banks fell victim to scams in the 2022 financial year, bearing 96 per cent of the losses as reimbursement and compensation rates remain extremely low. ASIC is now pushing financial institutions to improve their approaches to scams and better support their customers.

The Australian Securities and Investments Commission (ASIC) has called on financial institutions to improve their handling of scams following its analysis finding customers of the big four banks lost more than $550 million from scams last financial year, with the consumer bearing nearly all of the loss.

The report, which found more than 31,700 customers affected by scams in the year through June 2022, focussed on major banks Commonwealth Bank of Australia (CBA), Westpac Banking Corporation, National Australia Bank (NAB) and ANZ as they are “at the forefront of scam prevention, detection and response in Australia”, ASIC explained. It looked at the banks’ approaches to preventing, detecting and responding to scams.

“Australia’s big four banks have invested significantly in their anti-scam efforts over the last several years and have implemented a number of innovative and positive initiatives, including some recently implemented following the conclusion of ASIC’s review,” ASIC deputy chair Sarah Court said.

“However, the increasing prominence of scams means that there is still more to be done,” she added. “Combatting scams is a critical task for all of corporate Australia – financial institutions, telecommunication providers, digital platforms and other organisations need to work cohesively to stop scams at the source.”

The report found Australia’s major banks had a variable approach to scams strategy and governance that was “overall less mature than expected,” citing inconsistent and narrow approaches to determining liability, as well as gaps and inconsistencies in how the banks detect and stop scam payments. Scam victims were not always supported by their bank, and “while there were examples of emerging good practice, steps taken to help prevent customers [from falling] victim to scams varied across banks”, ASIC said.

“Our review found there were inconsistent experiences and outcomes for customers who were the victim of a scam, and in some cases a banks’ response may contribute to further distress for a customer,” Court said. “Banks need to reconsider the ways they respond to and engage with scam victims to reduce further distress and help them better manage the situation.”

When a scam is successful, the report showed, bank customers overwhelmingly bear the losses, with customers accounting for 96 per cent of total scam losses across the four major banks. In addition, the banks collectively detected and stopped only 13 per cent of scam payments made by their customers.

Customers who made a complaint were more likely than those who did not to receive a compensation payment from their bank, and across the three banks for which the relevant data was available, only around 11 per cent of customers who experienced a scam loss were reimbursed or compensated. The reimbursement and/or compensation rate varied but was low across the banks, ranging from 2-5 per cent.

“We’d like to see the banks take steps to evolve their scam management practices, including how they inform and educate customers and help them through what is a distressing time,” Court said. “ASIC expects that this review will aid banking and other financial services businesses, telecommunication providers, digital platforms and other organisations in developing consumer-focussed scams management practice and strategies.”