Australian banks to roll out new payee system to tackle ‘global scam epidemic’

Australian banks to roll out new payee system to tackle ‘global scam epidemic’

In a bid to protect Australians from the ‘global scam epidemic’, banks across the country will introduce a new anti-scam system that will block customers from transferring funds if the name listed by the sender does not match the recipient.

This is just one measure part of the ‘Scam-Safe Accord’ – a project led by the Australian Banking Association (ABA) and Customer Owned Banking Association (COBA) that will be rolled out across all banks, as well as mutual banks, credit unions and building societies.

The name-checking technology will be introduced throughout 2024 and 2025 so that customers know who they are sending funds to, mitigating the possibility of people being manipulated into paying a scammer when the name does not match. 

"The initiatives we launch today are a significant step forward and demonstrate the banking industry’s commitment to fight scams,” said COBA CEO Mike Lawrence.

“It doesn’t matter if someone banks with a regional mutual bank or the largest bank in the country, customers can be confident their bank is working hard to protect their money.”

Other measures being introduced include biometric checks to prevent misuse of bank accounts, with the process involving a check of a customer’s face, fingerprint, or behaviour.

Financial institutions will also ask more questions and implement warnings and delays when a customer is transferring money to someone they have never paid before in order to act as a mitigant when scammers put pressure on customers to transfer money.

As part of the Scam-Safe Accord, banks have also committed to joining the Australian Financial Crimes Exchange (AFCX) to share scam intelligence across the banks and limit payments to high-risk channels, including some cryptocurrency platforms.

“This Scam-Safe Accord is a new offensive in the war on scams. It reflects the banking sector’s unwavering commitment to safeguarding every Australian,” said ABA CEO Anna Bligh. 

“It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams.”

According to a report by the Australian Competition and Consumer Commission (ACCC), Australians lost $3.1 billion from scams in 2022 – reflecting an 80 per cent increase on the year prior.

The Targeting Scams reportalso found that investment scams were the highest loss category (1.5 billion) last year, followed by remote access scams ($299 million) and redirection scams ($244 million).  

“We’re in the middle of a global scam epidemic and while there is no silver bullet, we need to make it as hard as possible for these criminals to be successful,” said Chris Sheehan, who is the general manager of group investigations at NAB.

“As an ABA member, we’ve played an active role in the development of the Scam-Safe Accord and believe it will provide a framework for the banking industry to help protect Australian consumers and small businesses from this global crime wave. The significant industry investment into a new confirmation of payee system will play an important role in addressing business email compromise scams.

“We need to stop the crime before it happens. That requires a coordinated, national effort across business sectors, governments, and the community to make it as hard as possible for these criminals to take Australians’ hard-earned money.”

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