Have we created a world where we cannot trust anyone? Where the digital divide has become a chaotic chasm, where the technologically adept are safe but the rest of us have to fend for ourselves?
Not only is the answer yes, but it is getting worse. The disrupters trumpet this as progress. It is not. It is almost medieval in its brutality and entrenches inequality. Nobody dares question the trajectory, nor to interrupt the disrupters.
Judging by the reaction to my column two weeks ago about how my wife and I were targeted by a most persuasive scammer claiming to be from our bank’s anti-fraud unit, there is a deep vein of distressed victims desperate for some action from regulators.
Underpinning our attempted scam was “spoofing” software that hides the true origin of a text message, which can purport to be sent from another number – in our case, our bank. It is rife.
Shirley (not her real name) explained how someone claiming to be from her bank demanded remote access to her laptop to enable the “removal of a virus” and she soon found herself $50,000 poorer.
Eve (not her real name) confessed to the self-doubt and guilt that is the legacy of falling for the now notorious “Mum I lost my phone; this is my new number …” scam. A request for emergency funds follows, to be deposited to a fresh account not linked to the lost phone. In a flash, $5000 was gone.
John (his real name) was sent an SMS that claimed he owed a substantial sum of money and nominated a BSB and account number into which the urgent deposit of funds was required to avoid a court summons. He owed no such debt and immediately reported the scam to his bank.
It seems reasonable that if a particular bank account is identified as being the destination of the proceeds of fraud, it ought to be straightforward for the bank to freeze that account or at least divert any further deposits into trust or escrow until its legitimacy – or otherwise – is established.
John notified his bank, which said it could do nothing. He asked banking watchdog Australian Prudential Regulation Authority to intervene. APRA referred him to the telecommunications watchdog, the Australia Communications and Media Authority, as a telco ought to be responsible for the carriage of a fraudulent text message.
AMCA referred his complaint back to APRA, which next sent his email to the Australian Financial Complaints Authority (AFCA), which in turn recommended he take it up with his bank.
Do we need a royal commission to get some action?Credit:Illustration by Matt Davidson
When APRA was told about how the “alphabet soup” had sent his complaint in a perfect circle, and that it was now on the rebound, it referred him to the corporate regulator, the Australian Securities and Investments Commission (ASIC). The banking ombudsman, the telecommunications ombudsman, the Australian Federal Police and state police could merrily join this exasperating cycle of futility.
Nobody takes responsibility for anything. Everyone – even those in positions of purported authority – wants someone else to take on the scammers, leaving a vacuum as the plethora of useless government and business organisations pass the buck.
To add insult to injury, victim blaming is rife, adding to the mental fragility of the duped.
The Australian Competition and Consumer Commission estimates that bank and phone scams cost Australians as much as $4 billion each year. Nobody really knows the true amount because so many victims are hesitant to report. They may think it is futile, or are embarrassed or in some cases think they have lost money they were not supposed to have.
Our banking and telco watchdogs are not as fierce as they should be.Credit:iStock
We all pay for this leakage, as the losses are embedded into the costs of our banking system.
Who should be doing what? Leadership must come from the federal government. Only at a national level can regulatory heads be banged together to force a different culture from those watchdogs charged with keeping us safe, and the banking and telco industries.
Technology has created the opportunity and technology can take it away. Better screening algorithms could detect suspicious and unusual activity. While overseas, I was contacted by my bank because of an atypical foreign transaction on my credit card. If the bank can react to a $150 transaction on my Visa card in France, how can it not raise an alarm about $50,000 purportedly withdrawn in the middle of the night by “Shirley”, who had never transferred anything remotely close to that amount before?
How about a public awareness campaign like those used for smoking or drink-driving? The government should nominate a lead authority and insist on a co-ordinated approach to beef up the regulators and bring the industries to sit together around a table to improve protection.
Or do we keep passing the buck while more vulnerable people lose their money?
Do we need a royal commission to get some action?
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