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Towards the end of #ScamsWeek2020, I just wanted reflect where we may be falling behind in terms of scam prevention and protecting people. 1/
Authorised push payment scams are fast-growing. These are scams when you are tricked into authorising a payment to an account you believe is legitimate, but is in fact controlled by a scammer. 2/
Some examples are lookalike bills, calls from your bank or ATO that your accounts have been compromised, or even romance scams. 3/
Is Australia is falling behind in this area? In the UK, they have a new voluntary code that provides for reimbursement where the person scammed was not to blame for the success of the scam: https://www.lendingstandardsboard.org.uk/contingent-reimbursement-model-code/ 4/
While it's a voluntary code, it does seem that it is resulting in reimbursement to customers who have been scammed: https://www.psr.org.uk/sites/default/files/media/PDF/20200330%20APP%20scam%20conference%20call.pdf 4/
Recent UK jurisprudence has also found that where a bank is on notice of something suspicious, it should suspend payments until it has made reasonable enquiries, and received sensible answers, to satisfy itself that the payments should be made. https://www.nortonrosefulbright.com/en/knowledge/publications/d2750295/supreme-court-upholdsbreach-of-quincecare-duty-of-care 5/
Here, the general approach is that the banks should be undertaking inquiries if a transaction looks suspicious. 6/
But it should be clearer that where a customer only makes a transfer because their will is overborne due to undue influence of scammer, that this is not a valid transaction & they should be reimbursed. 7/
Perhaps such an approach would provide an incentive for banks and payment systems operators to take more steps to prevent such scams. END
