Banks and telecommunications providers should aim to work closer together to prevent scams as Australians report over $550 million in losses.
According to the Australian Securities and Investments Commission (ASIC), 31,700 bank customers were hit by fraudulent activity in the last financial year despite financial institutions investing “significantly in their anti-scam" practices.
As stated in its report Scam prevention, detection and response by the four major banks, ASIC claimed that the increase in scam activity over time has been driven by a number of structural factors.
Two of these factors are the advances in technology that have improved a scammer’s ability to easily and cost-effectively target and contact scam victims and the move towards digital financial services, which has made it quicker and easier to both send and receive scam payments, the report claimed.
According to the Commission, some banks have been more successful in working with telecommunications providers to implement measures to minimise misuse of their phone numbers and SMS ‘alpha tags’ — effectively a bank’s name — while other banks have been quicker to adopt new technologies.
The report claimed that banks can work with telecommunications providers to block messages with specified alpha tags that are not from an approved point of origin.
Two unspecified banks out of of the major four had implemented blocking for at least their most commonly used alpha tag, ASIC said.
The other two banks are yet to implement any alpha tag blocking but had approached telecommunications providers to discuss the possibility of implementing this prevention measure.
In addition, banks can also work more with telcos to reduce a scammer’s ability to make calls that fraudulently appear as though they are coming from a bank’s phone number.
This is achieved by placing the bank’s number on a ‘do not originate’ list.
However, ASIC claimed that only two of the four major banks had implemented this control, while the other two had approached the telecommunication providers regarding implementation of this measure.
The Commission said this was one area where it is important for the broader scam ecosystem — including banks and telecommunications providers — to work together to strengthen the response 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. However, the increasing prominence of scams means that there is still more to be done,” said ASIC deputy chair Sarah Court.
Earlier this week, it was revealed that the total loss due to data breaches and scams reached a record $3.1 billion in 2022.
According to the Australian Competition and Consumer Commission agency (ACCC) Scamwatch's Targeting Scams report, financial losses rose by 76 per cent year-on-year, to $569 million alone. This is despite the number of scam reports dropping by 16.5 per cent to 239,237.