Banking lobby says customers are ignoring warnings about scams

Banks are already chalking up losses as people transfer money to scammers despite being warned of suspicious activity, the Australian Banking Association says.

Bank Association chief Anna Bligh made the comments to a Senate committee on Tuesday.

The Senate Economics Legislation Committee is running the ruler over the details of the Scams Prevention Framework Bill 2024.

The Bill would require social media companies, banks and telcos to “take robust steps” to prevent and respond to scams.

Ms Bligh said “the whole issue of reimbursement” for scammed customers should focus on scam prevention.

“It’s important customers have an understanding of when is the company liable, what is their obligations as a customer,” Ms Bligh said.

The banking lobby boss said banks had plenty of examples of anti-scam staff warning customers that a transfer looked suspicious, but the customer proceeded anyway.

“We believe the best way to protect Australians is to stop the scam from getting to them in the first place,” Ms Bligh said.

“By the time a customer is directing their bank to transfer money to another account, the scam has already happened.

“The person has already been tricked and they are about to send their money to a fraudulent investment scheme or a fraudulent romance scam.”

In its current form, the proposed Bill had “serious civil penalties” for companies which failed to protect customers, Ms Bligh said.

“And just as importantly, a regime that will allow those customers who have lost money because of a failure to comply by any of the companies involved, some redress and compensation.”

The hearing continues on Tuesday.

More to come