AFCA finds for banks on many scam complaints

Ian Rogers

Losses from the pernicious problem that is scams are being mitigated, at least from the point of view of banks, via the agency of the Australian Financial Complaints Authority.

Of the 60 or so determinations on this theme published so far this year by AFCA, Banking Day analysis finds that in around 90 per cent of the time AFCA found in favour of the bank, or “substantially in favour of the bank.”

AFCA publishes a selection of its determinations at its website, with a lag of more than 30 days. So determinations reviewed by Banking Day cover the period from January to late April.

These in turn are only a snapshot of the tens of thousands of AFCA outcomes of the tens of thousands of complaints resolved after reaching AFCA. The vast majority of complaints are resolved ‘by agreement’ in the early stages of AFCA’s process.

AFCA resolves tens of thousands of complaints and only a small proportion – 3 per cent of scams complaints – proceed to the stage of determination. Many scam complaints are resolved in favour of consumers without the need for an AFCA decision.

In a material proportion of cases the AFCA ombudsman concluded blame for the scam losses could only be pinned on the conduct of the fraudsters, and not the bank.

In most cases banks were able to show they adhered to their obligations under either the Banking Code of Practice or the Customer Owned Banking Code of Practice, and their own policies and terms and conditions.

Findings in favour of the complainant were few in the 60 determinations reviewed, and typically were down to faulty processes, having regard to the bank’s T&C’s or the Codes.