Australian banks announce new anti-fraud platform to help quickly freeze scam payments
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Loading... - Viola Bertoni
- 18 May 2023
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Australian banks have unveiled a platform designed to swiftly combat scam payments by enabling the immediate reporting of bank-to-bank fraudulent transactions. The Australian Banking Association introduced the Fraud Reporting Exchange (FRX) platform on Tuesday, aiming to enhance the chances of freezing and returning funds to customers. This innovative platform empowers banks to halt multiple fraudulent transactions associated with the same scam, share intelligence to prevent losses, and streamline fund restitution processes.
The launch of the FRX platform is a significant development, as it plays a crucial role in disrupting scams and contributes to the ongoing efforts against fraudulent activities, stated Anna Bligh, the CEO of the Australian Banking Association.
Seventeen banks, including the four major ones, have already signed up for the platform. A trial run demonstrated that the time required to resolve scam cases reduced by more than 50%. By jointly identifying fraudulently transferred funds, banks can improve their ability to prevent further customer losses.
Bligh emphasized the importance of promptly reporting fraudulent or scam payments to banks, as early notification enables swift action to prevent funds from reaching scammers.
In 2022, Australians lost over $3 billion to scams, often facing difficulties in tracking the funds due to transfers across multiple banks. To combat this issue, the government allocated $58 million to establish a national anti-scams center. This center will serve as a reporting hub, sharing information with banks, law enforcement agencies, and vulnerable communities.
While consumer rights groups welcomed the new platform, they argue that it alone is insufficient in preventing scams. They urge the government to implement a policy mandating banks to reimburse scam victims. Stephanie Tonkin, the CEO of the Consumer Action Law Centre, praised the industry's investment but emphasized the need for proactive measures by banks to prevent scams altogether. Tonkin cited a recent report showing major banks reimbursed only 2-5% of scam losses last year, which falls well below customer expectations. Mandatory laws that financially incentivize banks may be necessary to bring about substantial change.
