Banks say social media giants need to step up

Australian Competition and Consumer Commission (ACCC) deputy chair Catriona Lowe said in 2023, losses to scams happening via social media reached $95 million – up almost 250 per cent from 2020.

“A significant portion of those losses are happening via contact on WhatsApp, Facebook and Instagram, as well as online dating sites,” she said, noting the need for companies to develop tools to detect and remove scams.

Lowe said she was cautiously optimistic to observe a decline in scam losses from 2022 to 2023, reported to the watchdog’s Scamwatch service.

While ANZ’s internal data also showed a positive trend – a 43 per cent decrease in customer losses from the first quarter of the 2023 financial year to the same period this financial year, ANZ’s Johnson said there was no room for complacency.

“It’s a constant arms race, and we see scammers pivot really quickly,” he said, noting the emergence of investment scams where customers are encouraged to create a self-managed super fund and invest their funds into sham cryptocurrency, foreign exchange or shares. “What’s alarming about this, is we’ve seen scammers prepared to be extremely patient, taking weeks, if not months to gain the trust of victims, before we start seeing transactional activity take place.”

Johnson said this was especially common for romance scams mixed with investment scams, which have been on the rise. “Scammers will show off their lavish lifestyle and when the victim asks questions, that’s when the conversation turns to investment,” he said.

“It’s a constant arms race, and we see scammers pivot really quickly.”

Shaq Johnson, ANZ head of customer protection

Johnson said the extended periods of social engineering and psychological manipulation of victims made the bank’s ability to intervene especially difficult.

“For us to try to reverse the effects of this social engineering that victims have been subjected to for weeks or months, in a 20-minute conversation, is really hard,” he said.

Johnson said increasing friction in payments was a key way banks prevented scam losses, and that more friction would help, especially with digital payments on the rise.

Loading

“Between October last year and February this year, the amount of scam-related payments that we’ve stopped on cards was worth $19.9 million, which is almost a 500 per cent increase on the same period the previous year,” he said. “It absolutely works, but to introduce more friction, we need to ensure the service is there to back it up, and give customers the ability to reach us in a timely fashion.”

The ACCC’s Lowe said she supported a mandatory enforceable code – which the government has committed to introduce – in relation to scams, to ensure economy-wide minimum standards that require all businesses to comply.

“That’s going to be a really important part of shoring up our defences,” she said. “Scammers will find a weak link in the system and exploit that weak link.”