Bank transfers to be name-checked in $100m anti-scam effort
The industry's Scam-Safe Accord will introduce payee confirmation technology and expand biometric checks and intelligence sharing.
The banking industry has reached a landmark accord to adopt a raft of anti-scam measures including a $100 million commitment to deploy name-checking technology across the country.
The Scam-Safe Accord, announced Friday by the Australian Banking Association, included six priority initiatives to improve the standard of protection given to consumers and businesses.
It comes after reports of scams spiked in recent months, with the ACCC revealing in April that a record $3.1 billion was lost to scams in 2022, an 80 per cent increase on the previous year.
ABA CEO Anna Bligh said the accord represented a fresh offensive in the banking industry’s “war on scams”.
“It reflects the banking sector’s unwavering commitment to safeguarding every Australian. It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams,” she said.
The ABA, which represents community-owned banks, building societies, credit unions and commercial banks, said that the accord’s centrepiece was the industry’s undertaking to build and roll out a payee confirmation system.
“Confirmation of payee will help reduce scams by ensuring people can confirm they are transferring money to the person they intend to,” it said.
“All banks will roll out this name-checking technology so customers know who they are dealing with, mitigating the possibility of people being manipulated into paying a scammer when the name does not match. Design of the new system will start straight away and it will be built and rolled out over 2024 and 2025.”
It said banks would also introduce a requirement to use at least one biometric check for new customers opening online accounts by the end of next year to verify their identity. Over the same period, customers could also expect more warnings and payment delays when transferring money to new accounts or raising payment limits.
The industry has pledged to join the Australian Financial Crimes Exchange in 2024 and the Fraud Reporting Exchange over 2024 and 2025 to expand information sharing across the sector and help prevent scams more efficiently.
Assistant Treasurer Stephen Jones said the increase in protections for all consumers was a “significant and proactive” step and looked forward to ongoing engagement between the government and banking sector.
“We are glad to see the banking industry taking their own proactive steps. Because of the work being done across government and industry, Australians are more aware and more likely to report scam activity,” he said.
Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson welcomed the ABA’s commitment and said it would address the “scourge” of invoice substitution scams and cyber crime faced by small businesses.
“Today’s pledge by the banking industry to roll out a new confirmation of payee system will go a long way to stopping scammers being able to divert invoice payments by simply and silently changing a bank account number,” he said.
“ASBFEO has been highlighting the urgent need for a ‘confirmation of payee’ scheme to be introduced in Australia, noting similar programs operate in other countries offering a really practical safeguard. This ensures people can confirm they are transferring money to the person intended and that names are matched to BSB and account numbers.”
Council of Small Business Organisations Australia CEO Luke Achterstraat said: “Small businesses are increasingly aware of cyber attacks and scams, which can be fatal for many firms. We need a whole of government and industry approach to improve Australian cyber security which is why we warmly welcome this initiative".
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