Banks are stepping up their efforts to protect their customers against scams, announcing the launch of a Scam-Safe Accord whose first project will be the development of a confirmation of payee system.
In a joint statement released on Friday, the Australian Banking Association and the Customer Owned Banking Association said the industry would invest A$100 million in the program, which will be used by all banks.
Under confirmation of payee, when a consumer or business sets up a new payee or amends an existing payee’s details, they receive a message from their bank confirming that the details entered match the account of the person or organisation they are paying.
Consumers are told if the details are a “close match’ or not a match at all and advised to check before proceeding.
The ACCC has been pushing for the introduction of confirmation of payee for some time. Its position is that the introduction of such arrangements in the UK and Singapore has helped make payment systems safer.
The ABA and COBA said the development of a confirmation of payee system is a major undertaking, given the volume and value of payments, and it will take a year or two to roll it out.
Banks have also committed to introduce new protections into their systems. There will be more warnings when a customer is paying someone new or increasing payment limits. Biometric checks will be used when new accounts are being opened.
The accord will include co-ordinate more effective intelligence sharing across the industry. All banks will act on scam intelligence from the Australian Financial Crimes Exchange from the middle of next year and join the Fraud Reporting Exchange.
And banks will limit payments via “high-risk gateway channels” such as crypto currency platforms, especially where money is being moved out of Australia.
The ACCC reported scam losses of $3.1 billion in 2022 – in increase of 80 per cent over the previous year. Its sources included Scamwatch, ReportCyber, the Australian Financial Crime Exchange, IDCARE, ASIC and other government agencies.
The minister for Financial Services Stephen Jones said the government welcomed the formation of the Scam-Safe Accord, describing it as an important step in the fight against scammers.
The government committed $58 million in the May budget for the establishment of the National Anti-Scam Centre within the ACCC. The centre opened in July, announcing that representatives from the ACCC, ASIC, banks, telcos and digital platforms would work on its first project – a study to identify ways of disrupting investment scams.
The ACCC said the centre would operate by way of “fusion cells … time-limited taskforces designed to bring together expertise from government and the private sector to address specific, urgent problems”.