Australian banks should reimburse scam victims, ACCC and consumer advocates say

In October 2021, Anne, a Victorian education consultant, lost almost $100,000 within 48 hours after scammers hacked her email, posed as her and directed her clients to pay invoices into a different account.

Last year more than 239,000 scams worth $570m were reported to Scamwatch, with false billing scams the second most common type reported. The organisation says this is just the tip of the iceberg, estimating that only 13% of all scams get recorded, and says someone who is scammed is unlikely to get their money back.

The Australian Competition and Consumer Commission also wants to see a model that would require banks to reimburse scam victims.

In the first year CoP was adopted in the UK it cut misdirected payments by 35%, according to the ACCC.

The Australian Banking Association did not respond to a request for comment on whether a model putting onus on banks to reimburse scam victims should be introduced in Australia.

An ABA spokesperson said banks covered almost $103m in customer losses in 2021, while financial institutions reported to the ACCC that they prevented or recovered nearly $341m from scammers in that period.

Last year Australian banks fought a push from consumer advocates to refund scam victims, telling the Australian Securities and Investments Commission it risked creating complacency among customers.

The federal government pledged during the election to bring in a tough new code for banks. But at a conference last year, the financial services minister, Stephen Jones, pushed back on the idea banks should be liable for losses.