Scams could be stopped if Australia’s banks made one simple ‘confirmation of payee’ change

Australia’s banks could cut down on scammers who are stealing thousands from hard-working Aussies with just one simple step, a consumer law expert revealed. 

Mitch Wilson and Penny Davies are the latest victims of a sophisticated fraud that saw their life savings and dream Gold Coast home vanish.

The couple received an email from their estate agent asking them for a final payment of $39,000 with bank details for them to transfer the cash.

But the email was a fake – and the bank account was set up by fraudsters who immediately spirited the cash away into untraceable cryptocurrency.

Now, the Consumer Action Law Centre has told Daily Mail Australia that scams like the one that hit the couple could be avoided if banks just checked the names of the accounts money was being paid into. 

Currently, fraudsters can give bank details to their victims with any account name on them. 

Banks then check the BSB and account numbers used in a transfer but do not check if the name used matches the one on the account. 

Gerard Brody, from Consumer Action Law Centre, says the current system leaves Australians at risk of scams. 

‘Checking the name is called ‘confirmation of payee’,’ he told Daily Mail Australia. ‘At the moment, there is no confirmation of payee in the BSB and account number transference online. 

‘The risk sits with with you as the individual to get those numbers right and the bank doesn’t double check that the account name you put in is going to the right accounts.

‘If you look on online platforms, they’ll have a warning about it. But I’m not sure how effective that warning is because it’s not that prominent.

‘Reforms in the UK and other countries now require banks to do confirmation of payee. Here in Australia, there have been calls for banks to do the same but they are not and that raises big risks for scams.’

Mr Brody said Aussies can currently get their money back if they are victim to frauds like their card or account details being stolen and used without their knowledge. 

However, he says if you authorise the fraud, like Mr Wilson and Ms Davies were tricked into doing, it can be a lot harder to get reimbursed by your bank.

‘It can be very easy to get scammed, unfortunately, and they can be very sophisticated including these sort of impersonation scams,’ he said. 

‘They can often get people in a moment of panic and we know that when people are stressed, they’re not thinking straight. 

‘It doesn’t seem fair that individuals bear the full losses associated with scams and so what we’re pushing for is there to be stronger measures in place to prevent fraudulent bank transactions from being processed.

‘Over in the UK, they have been progressive on this issue. There has been a voluntary code for the banking sector that says that they will reimburse blameless victims of scam losses even where it’s an authorised scam.

‘The UK Parliament has just introduced legislation to sort of mandate that code. That is really the main driver. If we make banks more liable to cover fraud victims than there’s a greater incentive for them to be making sure the payment system is safe.

‘They’ll put in systems and other measures that could reduce the risk of scam losses.’

Mr Wilson and Ms Davies only found out they had been conned when the estate agent contacted them several days after the cash was transferred to say they had yet to receive it. 

Police believe the criminals had hacked into the estate agents’ email, secretly taking control of the account and then pouncing when they saw a chance to scam the unwary couple.

The hackers send an apparently genuine email which seems to come from the authentic business – but with the fake bank account details.

The scam is so sophisticated it can leave both sides baffled and battling over how the rip-off has happened.

‘It plays over and over in my head all of the time,’ Ms Davies told 9News.

Mr Wilson added: ‘We went back and forth, we exchanged screenshots and emails from their side and ours, and what was obvious is the money didn’t go where it was supposed to go which was their account.

‘It ended up in some fraudster’s account and then offshore to a crypto account.’

The couple are now locked in a legal row with the estate agent in a bid to recover at least some of their cash after missing out on the dream home they were buying.

But commercial lawyer Shane Grant warned: ‘Unfortunately the thing is most of these are occurring in commercial transactions where there are two innocent parties.’

Police warn anyone transferring cash to follow up email instructions with a phone call to double check bank account details are correct before sending any money.

Ian Wells from the Queensland Police Service Cyber Crime Group added: ‘These people with these skills, they’re very cunning, they’re very calculated.’