In a bid to clamp down on authorised push payment scams, Australian banks have launched a digital platform for the reporting of fraudulent payments en route or transferred to another bank.
The new Fraud Reporting Exchange (FRX) platform has been developed to disrupt fraudsters and scammers by allowing the reporting of scam payments in close to real time, boosting the likelihood that funds can be frozen and returned to customers.
“Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” Australian Banking Association (ABA) CEO Anna Bligh says. “It means more and more scammers are going to hit a brick wall and adds to the arsenal of anti-scam initiatives underway."
Owned and operated by the bank-backed Australian Financial Crimes Exchange (AFCX), the new platform has 17 banks onboard or in the process of joining up.
At launch, it will give banks the ability to halt multiple fraudulent transactions taking place as part of the same scam, share intelligence to assist with loss-prevention efforts and offer a streamlined return of funds where possible.
Early trials of the FRX platform has shown that the time to resolve most scam cases dropped by more than half.
With the go-live of the new system, Bligh says it is imperative that consumers report a fraudulent or scam payment to their bank as soon as possible.
“The sooner that banks know about a fraud, the sooner they can take swift action to try to halt the payment before it gets to the scammers.”
Consumer groups have welcomed the service but believe banks should be doing more to stop scams from reaching consumers in the first place and be more proactive in reimbursing victims of APP fraud.
The CEO of the Consumer Action Law Centre, Stephanie Tonkin, says: “The recent Asic report showed that the major banks were reimbursing just 2-5% of scams losses last year. Until we financially incentivise the banks through mandatory laws … then we’re probably not going to see that much of a difference.”