Shocking odds reveal whether you can recover money after scammers take it

In the digital age, scams have become an unfortunate part of life, especially for those who may not be as familiar with modern technology as the younger generation.

Sadly, Australians are losing millions to sophisticated scams every year, and the road to recovery can be long and frustrating.

When it comes to getting your money back after being scammed, the odds are not in your favour, and it's a reality that's leaving many Australians heartbroken and in financial distress.


The Australian Financial Complaints Authority (AFCA) is an independent external dispute resolution service.

It is often seen as the last beacon of hope for victims who have lost their savings to scammers.

AFCA has the power to compel banks to compensate those affected.


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Full reimbursement for scam victims is ordered in only 4.8 per cent of cases by the Australian Financial Complaints Authority. Credit: Thx4Stock / iStock


However, a recent analysis of AFCA's published decisions over the past financial year reveals a grim picture:

Only 4.8 per cent of scam victims who took their case to AFCA received full reimbursement from their banks.

The statistics are sobering. Bank customers who escalated their complaints to AFCA's final decision process lost a staggering $12 million to scams since June of the previous year.


Still, the banks were only ordered to reimburse a mere $525,000 of that sum.

In 61 per cent of cases, victims received nothing, and in 28 per cent of cases, they were awarded 'non-financial compensation,' which might include a letter of apology or acknowledgment of the customer's frustration, but no actual money back.

The most common outcome for scam victims seeking redress through AFCA was to walk away empty-handed.

This has led to a public outcry and a campaign called People Before Profit, urging the federal government to mandate banks to compensate scam victims, similar to legislation introduced in the UK in October of the previous year.

The UK's approach is seen as a world-leading example, where banks must reimburse scam victims within five business days, except in cases of gross negligence.

This stands in stark contrast to the situation in Australia, where AFCA's hands are often tied by the outdated Australia ePayments code, which many believe is in desperate need of an overhaul.


AFCA's non-financial compensation is capped at $5,400, which is cold comfort for those who have lost much more.

In one particularly stark case, a woman who lost nearly half a million dollars to scammers was awarded just $250 in non-financial compensation after her bank delayed attempts to recover the funds.

In most cases where a victim has unwittingly transferred money to a scammer, AFCA has found that it wasn't the bank's fault because the customer 'authorised' the payment despite being deceived about the destination of their funds.

However, there have been instances where AFCA has ruled in favour of the victim, setting a precedent for future cases.

One such case involved an HSBC customer who fell victim to a sophisticated spoofing scam, resulting in a $47,000 loss.

AFCA ruled that the bank should reimburse the victim due to the exceptional circumstances of the fraud.


Despite these occasional victories, the overall picture remains bleak.

Australian cyber expert and forensic investigator Simon Smith describes AFCA as 'glorified mediators' and criticises the outdated legislation that leaves scam victims without adequate protection.

Banks can often defend themselves effectively in these cases, and since AFCA isn't an official court, they can't be compelled to disclose crucial information that could help the victim's case.

For the average scam victim, navigating the system is daunting and often fruitless.

It's a stark reminder of the importance of staying vigilant and informed about the risks of scams.

If you or someone you know has been affected by a scam, you must report it to the authorities and seek advice on the best course of action.
Key Takeaways
  • The Australian Financial Complaints Authority (AFCA) has a low rate of ordering full reimbursement for scam victims, with only 4.8 per cent of cases resulting in banks compensating the full amount lost to scams.
  • A majority of scam victims receive no financial compensation following AFCA's mediation process, with 61 per cent getting nothing and 28 per cent receiving non-financial compensation such as acknowledgements of frustration.
  • Like recent UK legislation, A campaign called People before Profit was launched, urging the Australian government to make compensation for scam victims mandatory.
  • Legislation and bank protocols in Australia are outdated, often leaving scam victims without support or proper recourse. AFCA is limited in its capacity to force banks to disclose information or attempt to recover funds.
Have you or someone you know been a victim of a scam? What was the outcome? Let's start a conversation and support each other in the fight against fraud.
 

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We got done for about $35,000 and our bank at the time (Westpac) offered us $9,000 because "we were long-time customers"., but that was only after an appreal from somebody who works in the system. The bank which the scammongrels used to move the money overseas in the click of a button was Bendigo.
Cannot see much of a change in any new laws to be passed. Forceful politicians are needed to get the banks to extract the digit and act in OUR interests and they're as scarce as hens' teeth.
 
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"(AFCA has the power to compel banks to compensate those affected.)"

BS. AFCA is just another toothless tiger installed by none other than Sen Janu Hugh when it comes to go against the Banks..

And that is a fact.
 
One has just about got to wrap ones self in cotton wool to stay safe. Do not use twitter, Facebook, internet banking, atm machines, mobile phones and so on! In the old days things were much easier - wish we could go back!
I fully agree with you but none of our Politicians have got the balls to stand up or go against the Banks.
I preached for years that what the Government should do was to turn AUSTRALIA POST into a Bank (as they are already doing Bank work) which would create some legitimate competition while owned by the Government but it was all a waste of breath. The Banks are calling the shots and our pollies are sitting on their train riding in first class.
 
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Banks created the on line banking in their panic to keep customers from soiling their pretty banks, and since creating a scene whereby the crooks dont have to actually rob the bank they can now rob the clients direct on line ...I feel the banks in creating this method of banking ,the banks should bear the responsibility of keeping it viable whilst protecting the customer and improve their security ,...which will only happen as long as they are liable
 
Banks created the on line banking in their panic to keep customers from soiling their pretty banks, and since creating a scene whereby the crooks dont have to actually rob the bank they can now rob the clients direct on line ...I feel the banks in creating this method of banking ,the banks should bear the responsibility of keeping it viable whilst protecting the customer and improve their security ,...which will only happen as long as they are liable
Could not agree with you more.
I believe that the UK has done this and now the Banks are forced to refund any money to clients lost via scams.
 
I fully agree with you but none of our Politicians have got the balls to stand up or go against the Banks.
I preached for years that what the Government should do was to turn AUSTRALIA POST into a Bank (as they are already doing Bank work) which would create some legitimate competition while owned by the Government but it was all a waste of breath. The Banks are calling the shots and our pollies are sitting on their train riding in first class.
Can you imagine the howls from the PO staff at having to do fair dinkum banking business?
 
Can you imagine the howls from the PO staff at having to do fair dinkum banking business?
Well put it to you in this way. I get better service any day of the week from Australia Post. I went to my bank to buy $10,000.00 Euros and they couldn't help me, than one of the teller said to me (quietly) go across the road to the PO. I did and no problems at all. It was all done in a matter of minutes but the only thing was that as the transaction was too large, I had to wait for a few days for the foreign currency to be sent to me. Quite good considering that I do not live in a large City.
You go and try to get some foreign currency changed at a Bank and see what response you get. And then if you get a cheque (not a large one) from overseas you might as well put it through the shredder.
 

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