The following article has been penned by NAB Executive Group Investigations, Chris Sheehan.

It’s always really hard to hear the stories from people who have been scammed. They are devastating.

I know everyone at NAB – from the Board and CEO down – cares deeply about this issue and how we can stop scams occurring. We have more than 500 experts in our fraud, scams and investigations teams working on the problem and supporting our customers. The industry is taking this extremely seriously and throwing a significant amount of resources to tackle this epidemic.

Noone wants to see anyone have money stolen.

However, we know that’s not the reality and scammers remain far too successful. We see that every day at NAB. Our Fraud team takes around 80,000 calls a month.

It’s why we support the Australian Government’s action on this. The Government is intending to apply new Scam Codes across telecommunications, social and digital media companies as well as banks. This is critical; scams almost never begin in a banking channel.

Stopping the crime before it happens must be the goal. The only way to do that is to enforce regulations on other areas where scams begin.

Without that approach it just continues to be a never-ending game of whack-a-mole, with scammers simply finding new ways to commit their crimes.

Australian Scam Code going further than UK model

The Australian Government’s intended Scam Code model goes much further than the United Kingdom (UK), despite the UK model often being referred to as the solution.

UK Finance’s 2024 Fraud report showed that scam losses decreased by just 5% from 2022 to 2023 despite the added regulation applied to banks. Overall, scam events continued to rise, up 12% from 2022 to 2023. The UK model isn’t stopping scams occurring.

According to the UK Finance report, bank impersonation scam losses were down by 21% year-on-year; however, romance scam losses rose by 17% and purchase scam cases were up 34% in 2023. Purchase scams are largely instigated through digital and social media marketplaces.

The UK model doesn’t cover scam payments made to international bank accounts, or cover scams which involve a payment made through a bank branch.

The UK model doesn’t cover scams where payments are made to some cryptocurrency platforms.

The UK model isn’t currently applied to their largest payments platform by volume, which is used for many high value payments by solicitors and conveyancers who are often targeted by criminals as part of business email compromise scams.

Gaps were called out by Pennington’s Law Firm in a 2022 article when the UK regime was under consultation: “Whilst the consultation highlights the fact that it is ‘focusing on the parts of the APP scam ‘ecosystem’ that are within [the PSR’s] remit’, it is clear that further intervention is required from other relevant sectors and regulators in order to bridge the gaps left by the mandatory reimbursement scheme.” 

This reinforces the Australian Government is on the right path to more holistically address the problem by also including social media companies, digital platforms and telcos as part of the intended Australian framework.

Bank-wide strategy to tackle the scams epidemic

We have a bank-wide scam strategy at NAB. We’ve introduced a range of actions over a sustained period to tackle the scam epidemic. Just a handful of examples include:

• Proactively working with telcos to address phone spoofing scams impersonating NAB.
• Being the first major bank to remove links from unexpected text messages to customers.
• Launching Payment Alerts in digital channels to make customers stop and check when a payment appears out of character or raises scam concerns.
• Introducing friction to payments by conducting real-time fraud checks when a payment is made, including the ability to hold any suspicious payments prior to a transaction being completed.
• Blocking payments to high risk crypto-currency platforms.
• Using cutting-edge biometric technology across digital channels like Internet Banking, the mobile app and NAB Connect to help detect suspicious activity.

We also continue to take action through the ABA Scam Safe Accord. Central to this is a $100 million investment by the industry in a new confirmation of payee system which will be rolled out next year. This will assist with ensuring the account name matches the account number and BSB, but won’t always be a solution given scammers often socially engineer their victims to ignore warnings provided via banking systems.

While there remains more to do, we’re seeing the investments and initiatives delivered by NAB and the broader industry starting to have a positive impact.

Scam losses trending down in Australia

In May, a new report from the ACCC showed scam losses reported to Scamwatch between January and March this year are down by 11% compared with the previous quarter.

That progress comes even before the Australian Government has introduced a formalised Scam Code across multiple industries.

There’s no doubt more action is required. Banks are absolutely clear on the integral role we must play in this.

We are onboard to take the fight up to the criminals.

Our aim must be to stop the crime before it happens, not to simply find an answer once money has been lost. That doesn’t stop these organised criminals from prospering.

Let’s make Australia the hardest country in the world for these criminals to be successful. That takes banks, telcos, social and digital media platforms and consumers all playing their part.