Australian Banks increase scam protection as complaints rise

One of Australia’s biggest banks has introduced protection against scams as customer losses reach a “record high”.

“Westpac Verify” will send alerts to customers about suspicious transactions, with the option to cancel payments before the money is sent if the customer believes they’ve been scammed.

Customers will be alerted if there is a potential account name mismatch for payments to new BSBs (Australian sort codes) and account numbers.

Any attempt to transfer money to a Westpac account they hadn’t previously transacted with will also be flagged.

In both instances the attempted payment will be put on hold for four hours and customers will receive a text message asking them to review the transfer.

Why is new scam protection necessary?

Westpac chief executive of consumer and business banking Chris de Bruin said the new security measure was a response to the unprecedented rise in scams seen in the bank’s latest customer scam data. This revealed that “customer losses reached a new record high in December, doubling from the year prior,” de Bruin said.

“The majority of scam-related transactions happen when a customer is tricked into transferring their money to a scammer via online or mobile banking,” he added. “They may think they’re sending money to a legitimate business, individual, or bank account they’ve been told has been set up in their name, but they’re not.”

Joining the Commonwealth

The move by Westpac follows Commonwealth Bank’s (CBA) announcement of similar enhancements to its scam prevention, detection and customer support strategy in February.

In an Australian banking first, CBA’s NameCheck technology gives customers an indication of whether the name and account details they entered look correct. 

Launching in late March, the technology will help reduce false billing scams (known as business email compromise) as well as mistaken payments.

CBA’s Group Executive Retail Banking, Angus Sullivan, said in a statement: “Scammers are attempting to cause harm to our customers and the community every day and we are working hard to utilise our technology and customer insights to help keep their hard-earned money safe.”

Sullivan also provided details of CallerCheck, a system that will verify whether people are genuinely speaking to the bank. “CallerCheck gives customers the confidence that our call is genuine and can be confirmed in real-time in the safe and controlled environment of the CommBank app.”

How frequent are scam complaints?

The Australian Financial Complaints Authority (AFCA) claims the number of complaints around scams rose by 28% in the past year. The organisation received 4,131 scam-related complaints in 2021-22, an average of around 340 a month.

The latest CBA Scams Community Survey also found that, over the past four months, 55% of customers have become more concerned about scams.