Rising Bank Impersonation Scams Pose New Threat for Australians

A teenage child looks at the screen of a mobile phone in London, on Jan. 17, 2023. (Leon Neal/Getty Images)

Authorities have warned Australians to take precautions against fake text messages pretending to be from banks as more victims report losing their life savings due to sophisticated scams.

According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, there were 14,603 reports of bank impersonation in 2022, resulting in a loss of $20 million (US$13.34 million).

If counting all the losses caused by phone and text scams, the figure soars to over $169 million, a significant increase compared to the $111 million loss in 2021.

However, the real loss was likely to be many times higher, with Scamwatch pointing out that only a small portion of scam victims report to the agency.

The ACCC said criminals were employing new technology to make their calls appear to come from a bank’s legitimate phone number or make their text messages look similar to genuine conversation threads used by banks to deceive Australian consumers.

“We are incredibly concerned about bank impersonation scams because they can be so convincing, they are very hard to detect,” ACCC deputy chair Catriona Lowe said.

Lowe explained that the recent mass data breaches in Australia had caused many people to respond to these fake calls and text messages out of fear that their private information had been exposed, thus falling victim to the scams.

“What’s equally worrying about this particular scam is that it is emptying every last cent out of victims’ savings accounts. This causes both financial and emotional devastation,” she said.

Devastating Losses Suffered by Victims

The deputy chair said the average loss from those scams was around $22,000, with 90 cases ranging from $40,000 to $800,000.

In one report, scammers robbed a man of $500,000 after they pretended to be a major bank’s security department staff and deceived him about an unauthorised payment.

“In another case, a man lost $38,000 after receiving a scam text message about a suspicious transaction. The scam text appeared in the same conversation thread as legitimate messages from his bank,” Lowe said.

“He called the number in the text and was put through to a member of the bank’s fraud team. Unfortunately, it was an elaborate scam, and he lost everything.”

This photo shows a scam message impersonating the National Australia Bank in Melbourne, Australia, on March 11, 2023. (The Epoch Times)

The ACCC also warned that scammers could impersonate the big four banks and other financial institutions.

In addition, their text messages and calls have content with a sense of urgency that prompt the victims to take action, such as detecting suspicious activity or a bank account getting frozen.

“It is critical to remember that no matter how legitimate the call or message seems, a bank won’t ask you to urgently transfer funds,” Lowe said.

“If you receive an SMS with a telephone number to call, do not use it. Likewise, hang up if you receive a call from someone claiming to be from your bank requesting you to transfer money to keep it safe.”

The ACCC also advised people never to provide online banking passwords, one-time security codes, pins or tokens to anyone over the phone and contact their financial institutions immediately if they think they have been scammed.

Australia Government Outlines Policy for Tackling Scams and Online Fraud

During the Australian Financial Review Banking summit on March 28, Assistant Treasurer Stephen Jones revealed the government’s strategies for tackling rising scams in the country.

Specifically, the plan targets four main areas of work across government departments: limiting the information flow at the source, rapidly identifying and responding to scams and frauds as they emerge, ensuring the safety of transactions, and rectifying damage when incidents occur.

At the same time, the assistant treasurer said establishing a national anti-scam centre would be crucial to the government’s goal of making scammers avoid Australia.

“Systemically, we want to make Australia the least favoured destination for international scammers and the hardest place in the world for domestic scammers to ply their trade,” he said.

The centre was introduced in November 2022 as the first step in the government’s plan to combat scams and online fraud.

The government has announced funding for the centre as part of a $12.6 million package and is in the process of setting it up.

The ACCC’s warnings come as Latitude Finance, a major financial services firm based in Melbourne, is struggling with the aftermath of a huge security breach that has compromised the personal data of 14 million Australian and New Zealand customers.

The stolen data includes 7.9 million driver’s licence numbers, 53,000 passport numbers and an additional 6.1 million records, including names, addresses, telephone numbers and dates of birth.