Banks urge social media companies to amp up protection as scammers become more patient
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In an age where our digital footprints are as significant as our physical ones, the convenience of social media and online transactions comes with a heightened risk of falling prey to sophisticated scams.
Australian banks are raising the alarm, urging social media giants to take a more proactive stance in scam prevention, as they witness a worrying trend that may see scammers ensnare more victims.
Scammers have shifted their strategies, moving away from quick-hit deceptions to more elaborate schemes, such as romance and investment scams that promise extravagant lifestyles.
These scams are not only financially draining, but also emotionally taxing, as they exploit the trust and patience of their targets over extended periods.
Australia and New Zealand Banking Group’s (ANZ) Head of Customer Protection, Shaq Johnson, and Westpac's Head of Fraud, Ben Young, have observed a rise in goods and services scams on several social media platforms.
‘The overwhelming majority of scams start on social media or via text message,’ Young pointed out.
‘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.’
According to Johnson, while the banks are doing their part by implementing anti-scam measures, they often come into play too late. The emotional manipulation has already taken its toll by the time the victim initiates a transaction.
He emphasised that a significant portion of scam engagement occurs on social media platforms, which is why these companies need to step up their efforts to combat fraud.
‘Banks are the last line of defence, because all the psychological manipulation and grooming happens outside the banking environment,’ Johnson asserted.
‘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 CEO Peter King earlier said that social media companies must take more responsibility within the ecosystem of online transactions.
‘Often scams pop up on social media,’ he stated.
‘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 expressed his desire for social media platforms like Facebook to take a more proactive stance in content moderation, particularly in light of the increasing influence of artificial intelligence.
‘There are lots of fake videos and impersonations of celebrities endorsing scams, which are becoming increasingly convincing,’ he explained.
The Australian Competition and Consumer Commission (ACCC) Deputy Chair, Catriona Lowe, reported that in 2023, losses to scams conducted via social media reached a staggering $95 million, marking an almost 250 per cent increase from 2020.
‘A significant portion of those losses are happening via contact on WhatsApp, Facebook, and Instagram, as well as online dating sites,’ she reiterated, emphasising the need for scam detection and removal tools from the companies.
Despite the grim statistics, Lowe noted a decline in scam losses from 2022 to 2023, as reported to the Scamwatch service.
However, while ANZ's internal data reflected a positive trend—a 43 per cent decrease in customer losses from the first quarter of the 2023 financial year compared to the same period in the previous year—Johnson reminded everyone not to be complacent.
‘It’s a constant arms race, and we see scammers pivot really quickly,’ he said, pointing out the appearance of investment schemes where individuals are prompted to establish a self-managed superannuation fund, and allocate their funds into fraudulent 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 highlighted that this occurrence is particularly prevalent in romance scams intertwined with investment schemes, which have witnessed an upward trend.
‘Scammers will show off their lavish lifestyle and when the victim asks questions, that’s when the conversation turns to investment,’ he explained.
Johnson also emphasised that the prolonged durations of social engineering and psychological manipulation of victims posed significant challenges for the bank's intervention efforts.
Additionally, he praised the enhancement of obstacles in payments in mitigating losses from scams, and suggested that introducing more roadblocks would be beneficial, particularly with the surge in digital payments.
‘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 declared.
‘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.’
Lowe expressed her endorsement for a compulsory enforceable code, a commitment the government has pledged to implement, concerning scams.
This code aims to establish minimum standards across the economy, mandating compliance for all businesses.
‘That’s going to be a really important part of shoring up our defences,’ she asserted.
‘Scammers will find a weak link in the system and exploit that weak link.’
As financial institutions grapple with the challenges posed by increasingly patient scammers, the urgency for collaboration between the banking sector and social media giants becomes ever more apparent.
This is more particularly in safeguarding vulnerable demographics such as seniors from falling victim to online fraud schemes.
We’ve got you covered on the latest dodgy schemes to watch for! Check out our Scam Watch forum for discussions on how to take better care of your hard-earned money!
Have you encountered any suspicious activity online? How do you protect yourself from potential scams? Share your experiences and strategies in the comments below!
Australian banks are raising the alarm, urging social media giants to take a more proactive stance in scam prevention, as they witness a worrying trend that may see scammers ensnare more victims.
Scammers have shifted their strategies, moving away from quick-hit deceptions to more elaborate schemes, such as romance and investment scams that promise extravagant lifestyles.
These scams are not only financially draining, but also emotionally taxing, as they exploit the trust and patience of their targets over extended periods.
Australia and New Zealand Banking Group’s (ANZ) Head of Customer Protection, Shaq Johnson, and Westpac's Head of Fraud, Ben Young, have observed a rise in goods and services scams on several social media platforms.
‘The overwhelming majority of scams start on social media or via text message,’ Young pointed out.
‘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.’
Experts warned that scammers are becoming more patient, and called for social media giants to take greater responsibility to prevent them. Credits: Shutterstock
According to Johnson, while the banks are doing their part by implementing anti-scam measures, they often come into play too late. The emotional manipulation has already taken its toll by the time the victim initiates a transaction.
He emphasised that a significant portion of scam engagement occurs on social media platforms, which is why these companies need to step up their efforts to combat fraud.
‘Banks are the last line of defence, because all the psychological manipulation and grooming happens outside the banking environment,’ Johnson asserted.
‘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 CEO Peter King earlier said that social media companies must take more responsibility within the ecosystem of online transactions.
‘Often scams pop up on social media,’ he stated.
‘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 expressed his desire for social media platforms like Facebook to take a more proactive stance in content moderation, particularly in light of the increasing influence of artificial intelligence.
‘There are lots of fake videos and impersonations of celebrities endorsing scams, which are becoming increasingly convincing,’ he explained.
The Australian Competition and Consumer Commission (ACCC) Deputy Chair, Catriona Lowe, reported that in 2023, losses to scams conducted via social media reached a staggering $95 million, marking an almost 250 per cent increase from 2020.
‘A significant portion of those losses are happening via contact on WhatsApp, Facebook, and Instagram, as well as online dating sites,’ she reiterated, emphasising the need for scam detection and removal tools from the companies.
Despite the grim statistics, Lowe noted a decline in scam losses from 2022 to 2023, as reported to the Scamwatch service.
However, while ANZ's internal data reflected a positive trend—a 43 per cent decrease in customer losses from the first quarter of the 2023 financial year compared to the same period in the previous year—Johnson reminded everyone not to be complacent.
‘It’s a constant arms race, and we see scammers pivot really quickly,’ he said, pointing out the appearance of investment schemes where individuals are prompted to establish a self-managed superannuation fund, and allocate their funds into fraudulent 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 highlighted that this occurrence is particularly prevalent in romance scams intertwined with investment schemes, which have witnessed an upward trend.
‘Scammers will show off their lavish lifestyle and when the victim asks questions, that’s when the conversation turns to investment,’ he explained.
Johnson also emphasised that the prolonged durations of social engineering and psychological manipulation of victims posed significant challenges for the bank's intervention efforts.
Additionally, he praised the enhancement of obstacles in payments in mitigating losses from scams, and suggested that introducing more roadblocks would be beneficial, particularly with the surge in digital payments.
‘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 declared.
‘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.’
Lowe expressed her endorsement for a compulsory enforceable code, a commitment the government has pledged to implement, concerning scams.
This code aims to establish minimum standards across the economy, mandating compliance for all businesses.
‘That’s going to be a really important part of shoring up our defences,’ she asserted.
‘Scammers will find a weak link in the system and exploit that weak link.’
As financial institutions grapple with the challenges posed by increasingly patient scammers, the urgency for collaboration between the banking sector and social media giants becomes ever more apparent.
This is more particularly in safeguarding vulnerable demographics such as seniors from falling victim to online fraud schemes.
Have you encountered any suspicious activity online? How do you protect yourself from potential scams? Share your experiences and strategies in the comments below!
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