$2.7 billion banking crisis exposed after family loses $1.1 million to scammers
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In an era where digital transactions have become the norm, the trust we place in our financial institutions is paramount.
Yet, a recent revelation has shaken the confidence of many Australians, particularly those who have worked hard to build their nest eggs.
The 'deception' that has been exposed involves a staggering $2.7 billion crisis, where banks have been slammed for their role in facilitating scams that have left countless Australians out of pocket and, in some cases, financially devastated.
The heart-wrenching story of Cyndy's family, who lost $1.1 million to scammers, is a stark reminder of the vulnerability even the most diligent of us face in the digital age.
Cyndy's parents, a couple who had worked their way up from humble beginnings in Fiji to successful careers in Sydney, sold their home of 30 years, only to have their million-dollar profit vanish into the ether of a sophisticated bond investment scam.
‘My dad is a certified practising accountant, he is well versed in finance, which is another thing that he was able to get scammed, it shows you the sophistication and complexity of these scams,’ she said.
Despite her father's expertise and his meticulous due diligence—which included verifying details with the banking regulator, searching ASIC records, and consulting with bank branch managers—the family fell prey to the scam.
He transferred $800,000 and $300,000 to one of the major banks and an additional $300,000. Despite a fraud alert freezing his account for this transaction, it eventually proceeded.
The fraudsters could open bank accounts using expired foreign passports, a fact that Cyndy discovered only after the money had been irretrievably transferred overseas.
The family reported the incident to the police, and Cyndy said they were shocked to discover that banks had not properly verified identification when opening accounts. According to the police, one of the scammer's bank accounts was opened using a photocopy of an expired foreign passport.
Cyndy criticised the banks for being complicit in enabling scams.
‘Australians don’t have anywhere to go. Right now, the system is set up so that banks have all the power. They are knowingly funnelling money out of the country and contributing to the scams,’ she said.
‘The fact is that Australian banks are complicit in facilitating money laundering and perpetuating a crime against hard-working Australians and primarily elderly Australians. No matter how educated people are and how they do their due diligence, they never had the capacity to check if that bank account was fraudulently set up.’
‘It infuriates me that banks blame people for falling for the scam—no, this is a crime that has been facilitated by Australian banks on Australian citizens.’
This incident is not an isolated one. Australians lost $2.74 billion to scammers in 2023. The situation has been described as a 'crisis', with the big four banks coming under fire for handling such scams.
The banks' response, or lack thereof, when customers fall victim to scams has been heavily criticised, with many calling for greater accountability and protection for consumers.
The Consumer Action Law Centre CEO, Stephanie Tonkin, has voiced the frustration of many, pointing out that banks often blame customers for falling for scams despite the increasing sophistication of these criminal deceptions.
‘Instead of accepting responsibility, our banks pile on the injustice and blame their customers who pay them to keep their money safe from increasingly sophisticated crimes and deception,’ she said.
‘88 per cent of people polled and 91 per cent of those over 55 believe the sophistication of these crimes means anyone can become a victim. Almost every Australian is now fearful their money is going to be stolen because their banks are not doing enough.’
‘The onus continues to be on the customer to avoid being scammed against malignant forces over which they have no control, and its exasperating banks offer little to reduce scams to keep people’s money safe and secure.’
The current reality, however, is grim. Many banks only reimburse a fraction of the money stolen due to fraud despite recording profits.
For instance, in May, the Commonwealth Bank of Australia reported a profit of $2.4 billion for the six months to the end of March, while Westpac, ANZ, and NAB reported similarly staggering figures.
In contrast, the United Kingdom has introduced laws that force banks to compensate scam victims, a move that has incentivised banks to invest more in scam detection and prevention.
Under the UK scheme, customers are reimbursed within five days, with both the sending and receiving banks held responsible for the loss unless the customer has acted fraudulently or with gross negligence.
The Australian Banking Association, however, has resisted similar measures, citing concerns that it would create a 'honeypot' effect, potentially attracting more criminals.
Yet, public opinion is clear, with 75 per cent of Australians in favour of the government introducing laws to force banks to refund customers who have been robbed via scams.
The Albanese Government has indicated plans to introduce scam legislation that will set a high bar for banks and companies to prevent scams.
However, Australians remained sceptical, with less than one in three people believing the country is on track to have the best anti-scam legislation in the world.
Have you or someone you know been affected by a scam? What measures do you think should be taken to protect consumers from these sophisticated crimes? Share your thoughts in the comments below!
Yet, a recent revelation has shaken the confidence of many Australians, particularly those who have worked hard to build their nest eggs.
The 'deception' that has been exposed involves a staggering $2.7 billion crisis, where banks have been slammed for their role in facilitating scams that have left countless Australians out of pocket and, in some cases, financially devastated.
The heart-wrenching story of Cyndy's family, who lost $1.1 million to scammers, is a stark reminder of the vulnerability even the most diligent of us face in the digital age.
Cyndy’s family lost $1.1 million to scammers. Credit: Shutterstock
Cyndy's parents, a couple who had worked their way up from humble beginnings in Fiji to successful careers in Sydney, sold their home of 30 years, only to have their million-dollar profit vanish into the ether of a sophisticated bond investment scam.
‘My dad is a certified practising accountant, he is well versed in finance, which is another thing that he was able to get scammed, it shows you the sophistication and complexity of these scams,’ she said.
Despite her father's expertise and his meticulous due diligence—which included verifying details with the banking regulator, searching ASIC records, and consulting with bank branch managers—the family fell prey to the scam.
He transferred $800,000 and $300,000 to one of the major banks and an additional $300,000. Despite a fraud alert freezing his account for this transaction, it eventually proceeded.
The fraudsters could open bank accounts using expired foreign passports, a fact that Cyndy discovered only after the money had been irretrievably transferred overseas.
The family reported the incident to the police, and Cyndy said they were shocked to discover that banks had not properly verified identification when opening accounts. According to the police, one of the scammer's bank accounts was opened using a photocopy of an expired foreign passport.
Cyndy criticised the banks for being complicit in enabling scams.
‘Australians don’t have anywhere to go. Right now, the system is set up so that banks have all the power. They are knowingly funnelling money out of the country and contributing to the scams,’ she said.
‘The fact is that Australian banks are complicit in facilitating money laundering and perpetuating a crime against hard-working Australians and primarily elderly Australians. No matter how educated people are and how they do their due diligence, they never had the capacity to check if that bank account was fraudulently set up.’
‘It infuriates me that banks blame people for falling for the scam—no, this is a crime that has been facilitated by Australian banks on Australian citizens.’
This incident is not an isolated one. Australians lost $2.74 billion to scammers in 2023. The situation has been described as a 'crisis', with the big four banks coming under fire for handling such scams.
The banks' response, or lack thereof, when customers fall victim to scams has been heavily criticised, with many calling for greater accountability and protection for consumers.
The Consumer Action Law Centre CEO, Stephanie Tonkin, has voiced the frustration of many, pointing out that banks often blame customers for falling for scams despite the increasing sophistication of these criminal deceptions.
‘Instead of accepting responsibility, our banks pile on the injustice and blame their customers who pay them to keep their money safe from increasingly sophisticated crimes and deception,’ she said.
‘88 per cent of people polled and 91 per cent of those over 55 believe the sophistication of these crimes means anyone can become a victim. Almost every Australian is now fearful their money is going to be stolen because their banks are not doing enough.’
‘The onus continues to be on the customer to avoid being scammed against malignant forces over which they have no control, and its exasperating banks offer little to reduce scams to keep people’s money safe and secure.’
The banks’ responses to its customers when they fell to scams have been heavily criticised. Credit: Shutterstock
The current reality, however, is grim. Many banks only reimburse a fraction of the money stolen due to fraud despite recording profits.
For instance, in May, the Commonwealth Bank of Australia reported a profit of $2.4 billion for the six months to the end of March, while Westpac, ANZ, and NAB reported similarly staggering figures.
In contrast, the United Kingdom has introduced laws that force banks to compensate scam victims, a move that has incentivised banks to invest more in scam detection and prevention.
Under the UK scheme, customers are reimbursed within five days, with both the sending and receiving banks held responsible for the loss unless the customer has acted fraudulently or with gross negligence.
The Australian Banking Association, however, has resisted similar measures, citing concerns that it would create a 'honeypot' effect, potentially attracting more criminals.
Yet, public opinion is clear, with 75 per cent of Australians in favour of the government introducing laws to force banks to refund customers who have been robbed via scams.
The Albanese Government has indicated plans to introduce scam legislation that will set a high bar for banks and companies to prevent scams.
However, Australians remained sceptical, with less than one in three people believing the country is on track to have the best anti-scam legislation in the world.
