Australian banks have announced a platform that will help them act quickly to freeze money being sent to scammers by allowing the reporting of bank-to-bank scam payments in close to real time.
On Tuesday the Australian Banking Association announced the new Fraud Reporting Exchange (FRX) platform, which will facilitate the quick reporting of fraudulent payments as they are transferred to another bank. The move will boost “the likelihood that funds can be frozen and returned to customers”, the association said in a statement.
The new platform will give banks the ability to halt multiple fraudulent transactions taking place as part of the same scam, share intelligence to assist with loss-prevention efforts and offer a streamlined return of funds where possible.
“Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” the Australian Banking Association’s (ABA) chief executive, Anna Bligh, said.
“It means more and more scammers are going to hit a brick wall and adds to the arsenal of anti-scam initiatives under way.”
So far 17 banks, including the big four, have signed up to the platform, with a trial showing the time to resolve scam cases dropped by more than half.
“Banks are now better placed to jointly identify funds which have been fraudulently transferred, which should improve their ability to prevent any further losses to a customer,” Bligh said.
Bligh said it is imperative that consumers report a fraudulent or scam payment to their bank as soon as possible.
“The sooner that banks know about a fraud, the sooner they can take swift action to try to halt the payment before it gets to the scammers.”
Australians lost over $3bn to scams in 2022 alone, with many victims losing funds because they are transferred via different banks, making them difficult to track.
The government announced $58m on Monday to fund a national anti-scams centre, which will report scams and distribute information to banks, law enforcement and vulnerable communities.
Consumer rights groups have welcomed the new platform but say it will not do enough to prevent scams and are calling on the government to implement a policy that would see banks reimburse scam victims.
The CEO of the Consumer Action Law Centre, Stephanie Tonkin, said the “investment by the industry is really fantastic” but banks should be “preventing scams from reaching consumers in the first place”.
“The recent Asic report showed that the major banks were reimbursing just 2-5% of scams losses last year,” she said. “I think that’s well below what customers will be expecting.
“Until we financially incentivise the banks through mandatory laws … then we’re probably not going to see that much of a difference.”