Chilled to the Bone

Scott,

I felt chilled to the bone when I read about that poor family who lost their house deposit to scammers. Is there anything we can do for them? They have seven kids! It just doesn’t seem fair that the bank would only refund them $5,000 and the cops say ‘too bad’. There has to be justice!

Raj

Hi Raj,

I feel like I need to take a cold bath and scrub myself clean after the week I’ve had.

I’ve been inundated by readers sharing their scam stories with me. I also spent the week researching what could be done.

Here are some back-of-the-envelope calculations:

Last year Aussies lost $227 million to payment redirection scams. Yet we also know that roughly a third of people are too embarrassed to report they’ve been duped, so let’s call it $300 million.

Five years ago banks in the Netherlands introduced account name checking and it reduced this type of fraud by a staggering 81%! So that would save consumers a massive $243,000,000.

Yet that’s the customers’ money, and who gives a toss about them?

So let’s look at it from the bank’s perspective.

How many of the bank’s staff hours are chewed up dealing with those $300 million in losses?

From chasing the scammers, to dealing with the heartbreak of customers who lost their life savings, and even sometimes, maybe, kinda, partly refunding them.

It’d have to cost the banks tens of millions, at least.

It seems like common sense to me. Kind of like, if your bank makes you give them the account name of the person you’re transferring money to – it’s because they’re actually going to cross-check it.

So I had a commonsense chat with Stephen Jones, the Minister for Financial Services, this week.

I asked him if he could, say, get all the bank chiefs in a headlock and not let them go until they all agreed to check account names, and in doing so save their customers as much as $243 million and untold amounts of heartbreak.

He said that’s a really good question and one that he’ll be asking the banks. But he thought my headlock idea was taking things a little too far. I also gave him the details of the young family with seven kids who were scammed out of their deposit.

Let’s hope commonsense prevails.

Scott.