Scammers are becoming patient: Banks say social media giants need to step up
By Millie Muroi
Bank experts have warned scammers are becoming more patient, targeting victims through drawn-out romance and investment scams promising lavish lifestyles, and have called on social media platforms to step up their role in scam prevention.
While scam losses have been declining, the volume of some scam types have increased, including goods and services scams on platforms such as Facebook Marketplace, according to ANZ head of customer protection Shaq Johnson and Westpac head of fraud Ben Young.
“The overwhelming majority of scams start on social media or via text message,” said Young.
“There’s been a huge volume of buying and selling scams, and they always spike whenever there’s a scarcity in something, whether that’s COVID tests or Taylor Swift tickets.”
Johnson said while banks were putting in more anti-scam measures, it was often too late when victims got to the point of transaction because of the huge emotional cost involved, and that social media companies needed to do more to combat fraud.
“Banks are the last line of defence because all the psychological manipulation and grooming happens outside the banking environment,” Johnson said. “A huge portion of the initial engagement and ongoing engagement for scams happens on social media platforms. Social media plays a huge part in this ecosystem and I think they can do more.”
Westpac chief executive Peter King also said last week that social media companies needed to take more responsibility. “Often scams pop up on social media,” he said. “We can’t just say to the banks ‘you’ve got responsibility for that whole ecosystem’. We’ve got to get responsibilities across the ecosystem.”
Young said he wanted to see platforms such as Facebook play a more active role in filtering content, especially with the rise in artificial intelligence. “There are lots of fake videos and impersonations of celebrities endorsing scams, which are becoming increasingly convincing,” he said.
Australian Competition and Consumer Commission (ACCC) deputy chair Catriona Lowe said in 2023, losses to scams happening via social media reached $95 million – up almost 250 per cent from 2020.
“A significant portion of those losses are happening via contact on WhatsApp, Facebook and Instagram, as well as online dating sites,” she said, noting the need for companies to develop tools to detect and remove scams.
Australian Competition and Consumer Commission deputy chair Catriona Lowe.Credit: Dominic Lorrimer
Lowe said she was cautiously optimistic to observe a decline in scam losses from 2022 to 2023, reported to the watchdog’s Scamwatch service.
While ANZ’s internal data also showed a positive trend – a 43 per cent decrease in customer losses from the first quarter of the 2023 financial year to the same period this financial year, ANZ’s Johnson said there was no room for complacency.
“It’s a constant arms race, and we see scammers pivot really quickly,” he said, noting the emergence of investment scams where customers are encouraged to create a self-managed super fund and invest their funds into sham cryptocurrency, foreign exchange or shares. “What’s alarming about this, is we’ve seen scammers prepared to be extremely patient, taking weeks, if not months to gain the trust of victims, before we start seeing transactional activity take place.”
Johnson said this was especially common for romance scams mixed with investment scams, which have been on the rise. “Scammers will show off their lavish lifestyle and when the victim asks questions, that’s when the conversation turns to investment,” he said.
“It’s a constant arms race, and we see scammers pivot really quickly.”
Shaq Johnson, ANZ head of customer protection
Johnson said the extended periods of social engineering and psychological manipulation of victims made the bank’s ability to intervene especially difficult.
“For us to try to reverse the effects of this social engineering that victims have been subjected to for weeks or months, in a 20-minute conversation, is really hard,” he said.
Johnson said increasing friction in payments was a key way banks prevented scam losses, and that more friction would help, especially with digital payments on the rise.
“Between October last year and February this year, the amount of scam-related payments that we’ve stopped on cards was worth $19.9 million, which is almost a 500 per cent increase on the same period the previous year,” he said. “It absolutely works, but to introduce more friction, we need to ensure the service is there to back it up, and give customers the ability to reach us in a timely fashion.”
The ACCC’s Lowe said she supported a mandatory enforceable code – which the government has committed to introduce – in relation to scams, to ensure economy-wide minimum standards that require all businesses to comply.
“That’s going to be a really important part of shoring up our defences,” she said. “Scammers will find a weak link in the system and exploit that weak link.”
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