By John Collett
Alerts before payments are made to potential scammers have saved customers at National Australia Bank $80 million since alerts were introduced a year ago, as the bank extends the system to more types of payments.
NAB’s alert system has led to a 25 per cent fall in scam losses, including $285,000 worth of suspected ticket scams during the three months to the end of January this year – a period that included additional ticket sales for Taylor Swift concerts in Melbourne and Sydney.
“Taylor Swift scams were rife across the banking industry,” says Chris Sheehan, NAB executive, group investigations.
Chris Sheehan, NAB executive, group investigations, says initiatives at the bank to combat scams have seen a 25 per cent fall in scam losses over the past 12 months.
“Criminals love these types of marquee events as they provide an opportunity to use the fear of missing out ... to their advantage,” Sheehan says.
The bank processed about one billion payments last year through its digital payment channels and flagged 18,600 scam events. Even though losses to scams are down, the number of scam events continues to rise.
Sheehan says artificial intelligence and machine learning are helping the bank understand how legitimate customers use their devices, such as mobile phones and laptops and look for unusual patterns in real time.
“We have to be selective when we fire alerts - we use our fraud models to nuance when we do that,” Sheehan says.
Customers are becoming better at ignoring suspicious calls, deleting questionable-looking emails, deleting bogus text messages, and not clicking on links in texts and emails.
The bank is also removing links from text messages, making it harder for criminals to impersonate bank phone numbers, blocking payments to some high-risk crypto platforms that are also making an impact, Sheehan says.
During its first year of operation, the payment alerts system covered suspected investment scams and “goods and services” scams, such as where a good is ordered and paid for online and never arrives.
Scamwatch estimates losses of more than $210 million to romance and dating scams and $225 million to payment redirection scams in 2022.
Payment redirection scams, also known as invoice scams, are where criminals hack into a business’ email account and change the account details on legitimate invoices. The criminals hope the recipient does not notice the account details and pays them.
The latest quarterly report by the National Anti-Scam Centre shows that in November 2023, scam losses decreased by more than 50 per cent compared to November 2022.
There was a 31 per cent decrease in losses by bank transfer over the last three months of 2023 compared to the same quarter in 2022, as banks do more under the Scam-Safe Accord, a bank-led initiative, such as issuing more warnings and payment delays to protect customers.
Banks are now regularly blocking or limiting suspect transfers to high-risk crypto exchanges.
The federal government’s proposed scam code framework will, under its initial phase, see banks, telcos and social media platforms take measures designed to better ensure they prevent, detect, disrupt and respond to scams.
They would also have to improve reporting and information sharing, as well as dispute resolution.
Consumer groups have been calling for the framework to include a measure to force banks to compensate those customers who are scammed through no fault of their own, as is being introduced in Britain.
Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.