Doris McAllister spent her whole life working hard to support herself.
She began her career at the age of 15, diligently saving to purchase a home on her own following a divorce. She bravely battled breast cancer and faced numerous other challenges life presented.
Last year, at the age of 75, she encountered an international bank offering attractive returns on deposits. Believing it to be a secure opportunity to safeguard her retirement, she transferred her life savings of $260,000.
“I was feeling on top of the world because I thought, ‘Now I’m set for the rest of my life,'” she said. “I don’t have to work. I don’t have to look over my shoulder for where the next dollar is going to come from.”
However, six weeks later, when she attempted to make a withdrawal, she discovered she had been deceived. Scammers, posing as representatives of the Singapore-based bank DBS, had tricked her into transferring her entire savings to them.
“They made it sound so perfect, and I lost the lot,” she said.
Investment scams stole $1.5b in 2022: report
Ms. McAllister is far from alone, with a new report showing scammers stole record sums of money from Australians last year.
More than $3.1 billion was lost to scams in 2022 — an 80 percent increase from 2021 — according to a report from the Australian Competition and Consumer Commission (ACCC), Targeting Scams.
The report compiled data from more than 500,000 scam reports received across different agencies, including Scamwatch and the Australian Financial Crimes Exchange.
Breakdown of Losses in 2022:
- Investment scams: $1.5 billion
- Remote access scams: $229.2 million
- Payment redirection scams: $224.9 million
- Romance scams: $210.2 million
- Phishing scams: $157.6 million
- Other scams: $784 million
Source: ACCC Targeting Scams report
Most of the money was lost to fake investment scams, which accounted for at least $1.5 billion in losses.
“Fewer people are reporting investment scams [but] due to their nature, encouraging people to part with large sums of money … that is where we see the highest level of losses,” ACCC Deputy Chair Catriona Lowe said.
Hundreds of millions were also lost to remote-access scams, where a scammer gains control of a person’s computer or phone, and to payment redirection scams, where a scammer poses as a real business and sends invoices with fake bank details to victims.
The true losses are likely to be far higher, with the ACCC estimating that at least 30 percent of victims do not report what happened.
Older Australians lost more to scams than any other group, with people aged 65 and over falling victim more frequently and losing more money.
The frightening figures have prompted fresh calls by the consumer watchdog for the big banks to do more to protect their customers.
“These levels of losses make it pretty clear that what we need is a coordinated effort across government, across institutions and, indeed, across regulators, because we know that scammers will target the weakest link,” Ms. Lowe said.
Pressure mounts on banks to do more
Bank transfers were the most common method through which scam victims lost their money in 2022, according to the ACCC report.
The ACCC has recommended that Australia consider implementing measures similar to the United Kingdom’s Confirmation of Payee regulation, introduced in 2019 and now covering most banks in the country. This regulation requires banks to assist customers in verifying that they are sending money to the correct recipient by displaying a warning if the account details do not match.
Cybersecurity expert and victim advocate Simon Smith emphasized that payee confirmation laws could have prevented thousands of scams in Australia. “In a modern country like Australia … it should have been done decades ago,” he said. “It would have solved probably half the cases I deal with, because the bank would say, ‘You’re not really paying Auntie Jane,’ or, ‘You’re not really paying this business, you’re actually paying some other business.'”
Mr. Smith also suggested that banks could take additional steps to educate customers before proceeding with transfers that appear suspicious.
However, the Australian Banking Association has rejected the call for uniform measures in a statement.
The Australian Banking Association (ABA) has responded to calls for uniform payee confirmation measures, highlighting the differences between Australia’s and the United Kingdom’s payment systems. Instead of adopting the UK’s Confirmation of Payee regulation, the ABA encourages consumers seeking additional protection to use the voluntary PayID technology for payments.
“We also need to recognise that payee confirmation does not help to prevent many common types of scams, and consumer vigilance is still required,” a spokesperson said.
Scam victim says loss was preventable
Ms. McAllister believes her devastating loss could have been prevented. She now knows her money did not go to DBS, as she had intended, and thinks Commonwealth Bank should have done more to warn her before approving her transfer. Last November, her case was heard by the financial ombudsman, where the bank defended the actions its staff took in processing the 75-year-old’s bank transfer.
The ombudsman ruled in the bank’s favor, stating it did all it was required to do.
Commonwealth Bank told the ABC it was implementing new scam detection, prevention, and education initiatives to help keep customers safe. “Once we have been made aware of a scam or fraud on an account, we work closely with other banks to take action and we do our best to recover any funds,” a spokesperson said in a statement.
In Ms. McAllister’s case, her money could not be recovered.
Before she was scammed, she was planning her first overseas holiday: a trip to New Zealand with a group of friends. Now she is living on the pension and trying to pick up catering work on weekends when she can.
“[Losing] any amount of money is bad, but when it’s such a high amount, it’s worse because, at my age, I know I can’t start again,” she said. “I’m positive that the government and the banks can do something.”
The federal government said it was not currently considering confirmation of payee regulation, but mentioned its plan included a national anti-scams center that would develop “tough new industry codes.”
