An executive at Australia’s financial watchdog had just finished a radio interview on scams when he realised he had become a victim himself.
Earlier this month Justin Untersteiner, the chief operating officer of the Australian Financial Complaints Authority (Afca), saw a message from his bank saying his account had been overdrawn by $4,000.
Realising he had been scammed, he blocked the card, then followed the bank’s instructions to use a messaging service to communicate the issue.
“What I got was a whole lot of generic information about how to protect yourself from scams, which was really unhelpful at that time when I was panicked,” he says.
“I finally got through all that and in the end it was ‘we can’t help you, you’re going to have to call this number’… and then I was on hold for an hour and 15 minutes until someone finally picked up, which is completely unacceptable.”
According to Untersteiner, banks have been slow to move on protecting customers from scams, with the onus being placed on Australians to shield themselves from increasingly sophisticated swindles.
Complaints to AFCA topped 100,000 for the first time last year, and of those complaints 9,000 were related to scams – nearly double the previous year. Many complaints related to the handling of scams by banks.
“We have been talking to many other jurisdictions around the world and often the comment that we receive is that Australia is an easy target because of that patchwork regulatory environment [and] because of the slow movement of the banks,” Untersteiner says.
“To receive now 103,000 [complaints] not even five years on from the Hayne royal commission [into misconduct in the banking industry] is really deeply concerning.”
Gerald Chin, who lost nearly $50,000 to a scam, lodged a complaint with Afca after the bank informed him the funds couldn’t be recovered. He contacted another scam victim, Sunni Wan, after reading in the news she had been scammed out of nearly the same amount as him in a similar way.
China and Wan each received a text from what appeared to be their bank, HSBC, in the same thread as previous correspondence, saying their accounts had been signed into using another mobile device. Both called the number listed in the text.
Wan believed she was talking to someone from the bank until the scammer told her there had also been unusual activity on her crypto exchange account, which is unrelated to HSBC.
She hung up and called the real HSBC number. But it was too late – the money had been withdrawn and soon after was deemed unrecoverable.
“I just broke down and cried,” Wan says.
Wan and Chin have been seeking out other HSBC customers who have been scammed and are yet to recover their money. They’ve formed a group with eight others who collectively lost nearly $1m between September and December last year.
“It’s to help each other to try and navigate how to get our money back,” Chin says. “But we also think placing pressure as a group will help see the banks take us more seriously and also show this is happening too much due to flaws in the system".
Ten other scam victims – who collectively lost $1.5m - joined forces in November, writing an open letter to Anthony Albanese that called for Australia to follow the UK’s new rules to be introduced this year requiring banks to reimburse victims.
Untersteiner says figures from the Australian Securities and Investments Commission – which found the rate of reimbursement was on average between 2% and 5% – showed the onus was being placed on Australians, not on banks.
“I don’t think that’s right based on the sophistication and the scale of scam activity in Australia,” he says.
Last year Australians lost a record $3.1bn to scams, up from $2bn in 2021, according to the Australian Competition and Consumer Commission. The value of losses reported to ScamWatch have decreased, dropping 13% between September 2022 and November 2023.
Untersteiner says he is optimistic scam activity will reduce after a series of steps taken by the government last year, including its launch of a national anti-scams centre, and the plan to introduce a mandatory industry code on scams.
In November, the banks buckled to pressure to do more to fight scams and announced they would introduce a scam-safe accord, which would include a $100m investment in a new “confirmation of payee” system to be rolled out across the sector.
Untersteiner applauds the step but says the confirmation payee system “should have been implemented years ago”.
A spokesperson from the Australian Banking Association said the accord would see a major expansion of intelligence sharing across the banking sector from mid-2024, improving the chances of recovering stolen funds. The sector will also introduce more warnings and delays when customers are paying someone new or increasing their pay limits.
“With 15.4 billion transactions worth $2.5 trillion occurring every year across the banking sector, the design and build of an industry wide confirmation of payee system is a major undertaking,” they said.
The spokesperson said banks reimburse customers depending on the circumstances and have a robust process to resolve complaints.
“The majority of customers have their complaints resolved successfully through internal dispute resolution,” they said.
