Annual Review 2023-24
Contents
- About this Annual Review
- Year at a glance
- Board Chair message
- Chief Executive Officer and Chief Ombudsman message
- Organisational overview
- Complaints
- Who complained to AFCA in 2023–24?
- AFCA Engagement with First Nations peoples
- Overview of complaints
- Open cases
- Closed cases
- Banking and finance complaints
- Buy now pay later
- Scam complaints
- Financial difficulty complaints
- Small business complaints
- General insurance complaints
- Significant events
- Life insurance complaints
- Superannuation complaints
- Investments and advice complaints
- Cryptocurrency
- Complaints lodged by consumer advocates and financial counsellors
- Complaints outside AFCA’s Rules
- Systemic issues
- AFCA’s Code compliance and monitoring function
- Engagement, awareness and accessibility
- Corporate information
- AFCA General Purpose Financial Report
- Glossary
Scam complaints received
Scam complaints closed
Stage at which scam complaints closed
|
Stage |
2023-24 |
|---|---|
|
At registration |
6,983 |
|
At case management |
2,616 |
|
At rules review |
591 |
|
Decision |
250 |
Top five scam complaint products (received)
|
Product |
2023-24 |
|---|---|
|
Personal transaction accounts |
6,163 |
|
Credit cards |
2,163 |
|
Online accounts¹ |
887 |
|
Electronic banking |
531 |
|
Business transaction accounts |
210 |
Time taken to close scam complaints
|
Time |
2023-24 |
|---|---|
|
Closed in 0-30 days |
5,104 |
|
Closed in 31-60 days |
2,227 |
|
Closed in 61-180 days |
2,286 |
|
Closed in 181-365 days |
747 |
|
Closed in more than 365 days |
76 |
¹ An online account is one where withdrawals need to occur through another account.
Key complaint and industry trends
Devastating outcomes
This year, AFCA received nearly 11,000 complaints related to scams, highlighting the severe financial and emotional impact on victims. The consequences of these scams are often devastating, with many individuals never recovering their lost funds.
Prevalent scam types
Phishing, spoofing, and remote access scams remain widespread. There has been a significant increase in bank impersonation scams, while investment and romance scams continue to cause major financial losses. Investment scams often involve transferring funds to cryptocurrency platforms, although efforts by financial firms to restrict these transfers have had some success.
Email compromise concerns
Email compromise scams, which involve intercepting and altering payment details, are particularly alarming. These scams can result in substantial losses, especially in property settlements and large transactions. Small businesses are increasingly targeted, raising concerns about their vulnerability to such fraud.
Inconsistent responses
How banks response to scams is inconsistent and as a result, leads to greater harm. For example, as of the writing of this report, not all major banks have adopted confirmation of payee technology – a proven method for reducing scam attempts and limiting their impact. Until we see all the banks implement confirmation of payee technology, we will continue to see these scams. Where banks have rolled this out, they have seen consumer protected. The financial sector has an opportunity to quicken its response to evolving scams and fraud, providing stronger protection for consumers.
Evolving scam tactics
Scammers, often part of sophisticated international crime syndicates, are continually adapting their methods to exploit new technologies and products. It can take time for someone to realise they have been scammed and to complain to their financial firm. This means that AFCA is a lag indicator of how scams are evolving.
Mandatory industry code
AFCA anticipates that the introduction of mandatory industry codes by the government will enhance scam prevention and protection, potentially reducing the volume of scam-related complaints reaching us.
Case study – Bank’s liability in fraudulent transfer
Background
The complainant, an unemployed individual on a disability pension, fell victim to an investment scam. He instructed his bank to transfer $245,000 to an overseas account. The bank’s scam team had flagged the complainant as a potential scam victim ten days prior, after a similar transfer had been halted. However, they were unable to reach him to discuss the situation.
Complaint
The complainant claimed that the bank was liable for the disputed transfer because he had authorised it during a phone call. The bank defended its position by asserting that the complainant had authorised the transaction, providing a recording of the phone call as evidence. Additionally, a transfer attempt to a different account, made five days before the disputed transaction, had been returned by the receiving bank.
Outcome
The ombudsman reviewed the call recording and found that the complainant’s instructions were unclear and inconsistent. Given the bank’s previous interactions with the complainant, it was apparent that the bank should have recognised the potential scam risk.
The bank’s inquiries during the call were found to be inadequate as they failed to investigate the investment in question, clarify the recipient’s account details, address inconsistencies in the recipient’s information, and reference recent unsuccessful transfer attempts.
Due to these shortcomings and the evident warning signs, the ombudsman determined that the bank should have identified the scam risk. As a result, the bank was ordered to reimburse the $245,000 lost by the complainant.
