If Australian banks continue to close branches at their current rate to boost their already astronomical profits, they should be forced to wear the cost of an inevitable consequence — more scamming of their loyal customers.
The push to make all banking online is playing right into the hands of the criminals.
But first, a few words on the crime.
“Scamming” is too mild a descriptor in this day and age. It is often serious fraud, in many cases perpetrated by organised crime syndicates. And it’s a surging growth industry, operated not just out of Indian call centres or eastern Europe, but in Australians cities and towns as well.
When last in the UK, I watched an episode of a TV show called Scam Interceptors, in which BBC journalists used ethical computer hackers to eavesdrop on criminals in real time as they talked to their victims. The difficult part for the hackers and journos was to identify the victims and quickly alert them before their bank accounts were drained.
My ears pricked when they said the confused gentleman being set up was “on the other side of the world, in Perth, Australia”. He was being groomed for a type of crime known as courier fraud that required a local meeting, meaning the crooks had people on the ground here.
Australians reported a record $3.1 billion lost to scams last year — 80 per cent more than the year before. The real figure is probably much higher, because many victims are too embarrassed or ashamed to admit to being conned.
Most of us know someone, a relative or friend, who has been duped. Scams aren’t just multiplying in number, they’re multiplying in type and getting ever more sophisticated.
The banks know all this. But they’re hellbent on getting everyone to do their banking online, despite the fact that many customers — predominantly older Australians — lack digital skills or internet savvy.
They’re sitting ducks.
Over-65s account already for 25 per cent of all losses.
People with intellectual disabilities and migrants from non-English speaking countries are also over-represented among victims.
Some 424 bank branches closed in the last financial year across Australia. In March, Bankwest announced it was closing all its branches this year. While acknowledging its transition to a wholly digital service would cause difficulties for some customers, it said fewer than 2 per cent visited a branch regularly.
Hard luck if you’re among the 2 per cent. Happy times if you’re an online crook.
WA’s Consumer Credit Legal Service is part of a coalition of consumer advocacy groups trying to persuade the Albanese Government to replicate the UK’s new rules, which make banks responsible for reimbursing losses, unless consumers have been grossly negligent or are acting fraudulently.
Under the UK model, reimbursement costs are split 50:50 between the bank that sends and the bank that receives the rogue payment.
There are also extra requirements on banks to better assist customers vulnerable to scams.
The Government here is looking at new mandatory industry codes to deal with the worsening scourge and has invited submissions on a proposed framework.
“If the money lost to scams were to come straight out of the bottom line of the industries who are the gatekeepers of people’s money, personal and online information, industry will be incentivised to significantly increase their investment in measures and new technologies to keep the public and their customers safe and secure,” a submission from the consumer groups said.
Banks claim they’re pulling out all the stops to protect customers, but a report by ASIC last year revealed that the four major banks detected and stopped just 13 per cent of scam payments in 2021-2022.
In the same period, more than 31,700 of their customers collectively lost more than $558 million through scams. The bank paid about $21m in reimbursement and/or compensation payments to the victims — 3.76 per cent of losses.
I think it’s fair to argue banks can be doing more to both protect and compensate their customers, especially if they’re forcing people to bank exclusively online, the favourite hunting ground of the tech-smart fraudsters.
You can rely on banks to do the profitable thing, which isn’t always the right thing. Maybe if banks were feeling a bigger share of the financial pain from this crime wave, they’d be more responsive.