Do Banks Love Scammers?
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Banks make lots of money because they have utilised digitisation to streamline their operations. Which in plain speak means they have sacked all their workers and machines do all the work. That automation, however, makes their services vulnerable to scammers who get hold of the pass codes. Do banks love scammers? There are no human gatekeepers to stop the flow of money from one account to another. The banks make their money from countless small fees charged on transactions and accounts. They make their money just as easily from the scammer’s account as they do from yours or mine.
“The latest Targeting Scams report has revealed Australians lost a record $3.1 billion to scams in 2022, as government, law enforcement and the private sector look to improve collaborative efforts to support the community in the fight against scams. This is an 80 per cent increase on total losses recorded in 2021.”
Does Your Banker Profit From Scams?
A bank used to be a safe place where you could keep your money locked up under the watchful eyes of security chaps with guns. No more! Today, banks are virtual places and your money numbers on a screen. Keeping your money safe is no longer high on a banker’s list of priorities, it seems. These professionals have better things to do in the 21C. Banking is about making money by selling customers financial products. It is about rent seeking via the extraction of fees and charges on the movement of our money. Banks don’t even bother paying interest on the use of our money these days. They only focus on charging interest on bank loans and mortgages.
The Commonwealth Bank of Australia made record profits of $10.2 billion in the last financial year. The fact that Australians lost more than half a billion to scammers out of their banks did not overly trouble them, it seems. Not my problem – is the bank mantra in Australia. Personal responsibility is where the buck stops, according to bank spokespeople.
“Of more than half-a-billion dollars lost through scams at Australia’s big four banks in 2021-22, only $21 million was paid back in reimbursements or compensation.”
Scamming & Australian Banks
Banks do not like to employ actual human beings in this day and age. Their scam departments are light on for employees to answer the phone in a timely manner. By the time you get through to report a scam or one of their own bank tellers reaches them the scammers have often syphoned all your money out of the country. Sorry does not seem to be the hardest word for Australian banks to say, as they wash their hands of any responsibility in quick order.
Customers of ANZ, Westpac, Bendigo Bank, CBA, and NAB all share similar stories when artful scammers steal their identity and their banked funds from out under the very nose of these banking establishments. “Not our problem, sorry.”
Bank Security Measures Not Stopping Scams
If the security measures put in place by banks are not working, surely the bank must bear some responsibility for a client’s loss of money by theft. If these pass codes and protocols are not stringent enough, then, things must be tightened up – right? Actually banks want unimpeded flows of money so that they can take their cut on every transaction. Banks want minimal interference from human hands upon these flows of money for several reasons.
- They do not want to pay the wages of human beings.
- The quicker the flow of money the more often they make their cut.
- The larger the volume of transactions the more money the banks make.
Convenience has been the replacement for security in the 21C in the business of banking. Automation has delivered the banks mega-profits for decades and they will not reverse this motza willingly. Bank managers and human oversight are a thing of the past in the banking world. It is all numbers on a screen and the extraction of fees and transaction charges on a massive scale. The demise of cash has seen the banks take control of monetary liquidity around the globe and we are all paying for it each and every time we use their products and services.
Do banks love scammers? If we dig a little deeper, will we discover a clandestine relationship between the two? Are there agents at large who have taken the secret knowledge of bank security measures over into the dark territories of the scammers? Somebody knows the ins and outs of banking security protocols and has spilled the beans for something in return. Have banks been remiss in how they have treated their cyber security staff in the past? There are a whole lot of questions to be answered around the scamming of banking clients in Australia and globally.
There is a push gaining some momentum to make Australian banks more financially liable for the losses incurred by their customers following identity theft and scams. Banks in the UK do refund their clients far more than here in OZ.
“A voluntary reimbursement model was introduced in 2019. Last year, it resulted in banks paying back about 66 per cent of losses to scam victims.
The United Kingdom will force banks to compensate scam victims under a world-first scheme that kicks off next year — and Australia could follow suit.
New laws in the UK represent a bold experiment to see if making the banking industry liable will drive down enormous losses, by incentivising banks to invest in detection and prevention.
In Australia, there has been strong resistance from the banking sector to compensate scam victims despite losses reaching a record of more than $3 billion last year.”
Banks, I think, have to recognise that the digital world is full of holes and that their digitisation has meant they and their customer’s money is vulnerable on this basis. Scammers and cybercriminals are far more organised now and are running operations like corporations. It is no longer good enough to place the onus and all responsibility on the client for the security of his or her money. Banks have a much bigger role to play and the money to fund reimbursement from the mega-profits they continually make. Australians need to demand better from their banks in this regard.
Robert Sudha Hamilton is the author of Money Matters: Navigating Credit, Debt, and Financial Freedom.
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