Financial complaints agency getting more powers to investigate scams

Banks that receive funds from scam victims will soon be subject to investigation by the Australian Financial Complaints Authority (AFCA), following a new ministerial direction issued by Assistant Treasurer Stephen Jones.

Currently AFCA does not have jurisdiction to look at the actions of a “receiving bank”, where the proceeds of a scam are transferred.

It can only consider the actions of the bank that has the direct customer relationship with the person or entity who has lodged a complaint.

That means that as it stands now, AFCA can only look into “sending banks” when investigating complaints.

The new ministerial direction will enable AFCA to investigate culpability of the receiving bank on behalf of a scam victim. It will empower AFCA to investigate the actions of every bank in the scam chain.

Mr Jones said the Federal Government had made fighting scams a priority from day one, with good results.

“It is having a real and significant impact. Scammers are finding it harder and harder to get through our defences,” he said.

“We want Australians to enjoy the benefits of online commerce but have trust that they are protected against the criminals trying to get their hard‑earned money.”

AFCA will work with industry and consumer groups over the coming months to finalise the implementation of this ministerial direction.

Changes will come into full effect in 12 months, to strengthen the pathways for victims to seek compensation where scams have taken place.

AFCA has welcomed the government’s decision, which was announced on Tuesday (11 March), and the news that scam reports to government agencies had fallen significantly over the last year.

“This authorisation condition change means that in the future, the actions of receiving banks can be considered as part of the full chain of events in a scam,” Chief Ombudsman and AFCA’s chief executive officer David Locke said.

“We welcome this direction from the government. AFCA will work with industry and consumer groups over coming months on the changes required to AFCA’s Rules to ensure a smooth transition to implement this change.”

The National Anti-Scam Centre’s latest Targeting Scams Report reveals that losses to scams had fallen 26 per cent in 2024, and the volume of scam reports by 18 per cent.

“This improvement demonstrates the positive impact of all stakeholders working together to tackle this crime,” Mr Locke said.

“However, the numbers remain large, with nearly 500,000 scam reports and $2 billion lost, and there is much more to be done.”

Once in force, AFCA’s additional authorisation as an ombudsman service for the financial sector will enable it to investigate not only receiving banks but also consider their actions in scam complaints.

The government has invested $180 million in combatting scams since coming to office. Scam losses have dropped by a third, after doubling every year in the three years before that.

Initiatives to date include legislating the world‑leading Scams Prevention Framework; establishing the National Anti‑Scam Centre; and funding ASIC’s takedown service, which has taken down more than 10,000 investment scam websites and online advertisements.

Modernisation of payment systems has also taken place, and the mandatory SMS sender ID register to combat mass scam text messages hitting people’s phones has been established.

Communications Minister Michelle Rowland said the government’s SMS Sender ID Register is helping to stop criminals from ripping Australians off through sophisticated text message scams.

“Fraudsters cause financial and immeasurable emotional and mental stress by impersonating legitimate organisations every day, but we are determined to do what we can to keep Australians safe.”