Bank impersonation scams rob Australians of life savings

Reports to the ACCC’s Scamwatch service confirm that scammers are using new technology to trick their victims by making phone calls that appear to come from the bank’s legitimate phone number or sending text messages that appear in the same conversation thread as genuine bank messages.

In 2022, Scamwatch received 14,603 reports of these scams, with losses totalling more than $20 million.

ACCC Deputy Chair Catriona Lowe is reported to be “incredibly concerned” about bank impersonation scams because they can be so convincing – and so hard to detect.

The irony is that recent mass data breaches along the lines of the Latitude Financial hack have made  Australians more likely to monitor their bank accounts for suspicious activity. The ACCC says this has led to consumers following the steps urged by scammers in these bank impersonation calls and texts out of fear their accounts have been compromised.

What’s especially worrying is that bank impersonation scams are emptying every last cent out of victims’ savings accounts, with losses averaging $22,000 and more than 90 reports of losses between $40,000 and $800,000.

The ACCC even knows of one man who lost over $500,000 after receiving a call from someone claiming to be from a major bank’s security department wanting to know if a payment had been authorised.

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. He called the number in the text and was put through to what he thought was his bank’s fraud team. Unfortunately, it was an elaborate scam, and the poor bloke lost everything.

What to watch for – and how to protect yourself

Bank impersonation scams don’t just target customers of the big four banks; they also hit up customers of other financial institutions.

The common thread is that the message has a sense of urgency or threat. The caller may claim, “your bank account has been accessed”, or “your bank account has been locked”. Or you may be told, “a payment has been made from your account. If this was not you, please call (phone number)”.

If you respond, the caller will tell you to transfer money to a different account to “keep it safe” or for “further investigation”. This is not standard procedure for a bank. It is a scam.

It is possible to protect yourself and your money against bank impersonation scams. The key is to remember that no matter how legitimate the call or message seems, your bank will not ask you to urgently transfer funds.

If you do receive an SMS with a telephone number to call, don’t use that number. Instead, call your bank on a number you have sourced from your bank statements or the bank’s own website.

If you receive a call from someone claiming to be from your bank requesting you to transfer money to “keep it safe”, the ACCC advises hanging up. Then call your bank using contact details you have found independently to verify the call.

Above all, never provide online banking passwords, one-time security codes, pins or tokens to anyone over the phone. Not for any reason. Ever.

Contact your bank or financial institution immediately if you think you have been scammed.

How does InvestSMART keep client accounts safe? Firstly, all InvestSMART Professionally Managed Accounts have their own HIN. The client is the full legal owner of all assets, not a custodian. Secondly, all clients can turn on two-factor authentication to access their account. Finally, we have verification for account changes. To talk further about our security please chat us in the bottom right or email invest@investsmart.com.au.