Australia lags on scam victim reimbursement

While other countries have introduced stronger protections and reimbursement schemes for scam victims, Australia continues to leave many bearing the financial burden of banking and regulatory failures, writes Dr Kim Sawyer.

WHY ARE SCAM VICTIMS not being reimbursed as they are in other countries?

It is a question that scam victims ask, particularly those who have incurred large losses. In the UK in 2025, 88% of the money lost to authorised push payment scams was reimbursed to victims, and 82% of claims were closed in five business days.

In 2025, the New Zealand Banking Association introduced a scheme requiring banks to reimburse victims up to $500,000 if they failed to protect customers. In Australia, scam victims who incur large losses receive no reimbursement and endure years of obstruction by banks.

In the second half of 2023, the Australian Financial Complaints Authority (AFCA) received complaints from 17 victims with losses exceeding $1 million. They were reimbursed nothing. The reimbursement rate in Australia for APP scams is less than 10%, far below that in the UK and even in the U.S., where large banks average 75%.

Australia treats scams as a personal mistake — not a consumer protection failure

We can't keep treating scams as private misfortunes in a digital marketplace that is increasingly complex, profitable and interconnected.

Many of the scam losses are due to the failure to introduce confirmation of payee, where the customer sees the name on the payee’s accounts to which they are transferring their money. Confirmation of payee has reduced fraud in the Netherlands by 81% and in the UK by 35%. It became mandatory in the UK in 2020 and was recommended by the Australian Competition and Consumer Commission (ACCC) as early as 2020. But the banks resisted.

Consider an analogy. A cheque is written to Jill Doe. If Jill Doe wants to cash the cheque, she would have to prove that she is Jill Doe. The writer of a cheque is not responsible if someone other than Jill Doe cashes it.

The analogy is relevant to the scam to which we were subjected. We transferred funds into term deposit accounts specified to be in our name, yet the scammer withdrew the money without showing identification, laundering the money within 24 hours. The banks failed to know the customer and to detect the money laundering.

The Government knew the banks had faulted their systems.

On 12 March 2024, the former Assistant Treasurer, Stephen Jones, gave an interview on scams, where he said:

So we were talking to them two years ago and we said okay confirmation of payee… if you've typed in the wrong number because there's no alpha‑numeric matching and you don't know whether you’ve sent the money to Hans instead of Jacquelin. That's a huge fault in their online applications. They were very resistant to rolling out confirmation of payee across the whole banking system, they've now agreed that has to be a core functionality.

Now the banks are rolling out confirmation of payee, but five years too late.

Online scams robbing Australians of billions

Australians lost a record-breaking $3.1 billion to scams last year — an 80% increase. Their lives are being ruined.

In that same interview, Stephen Jones said:

“I think we've got to attach liability and responsibility; there's going to be a connection between those two things... liability should apply but it should be where responsibility lies.”

However, the Government has refused to accept that the banks were responsible for the failure to implement confirmation of payee, that the banks were responsible for the failure to know their customer and that the banks were responsible for the failure to detect money laundering. The Government refused to accept that a fault in the systems of a bank implies the bank is liable.

Car manufacturers pay when there is a fault in their cars, or they are required to recall the cars. Why should scam victims pay for the fault of banks? Why are scam victims not reimbursed?

The Federal Treasury has evidently always opposed reimbursement, or at least the UK model. It is out of step with public expectations. A survey by Essential Media in 2024 found the vast majority (75%) of Australians expect banks to keep their money safe from criminal scammers, and if they fail, to return it to their accounts. Yet the Government refused to act.

Banks doing little to protect scam victims

As online scams continue to rob Australians of money, banks are doing little to protect customers or reimburse victims who have been targeted.

Now the Government's attitude appears to be changing. It is proposing that Australians who have lost up to $3,000 to scams could be entitled to automatic reimbursement as part of the Scams Prevention Framework. The reimbursement proposal would require banks, telecommunications companies and digital platforms to reimburse victims who have been scammed through their services.

Assistant Treasurer Daniel Mulino told ABC radio the automatic payment system makes sense as scams under $3,000 represented a high proportion of the total number of claims, but a relatively small proportion of losses. “Scams are a very insidious form of crime,” he said.

The proposal lacks natural fairness, pitting those not scammed and those scammed less than $3,000 against those who have incurred large losses, who will have to fight for reimbursement. Those most impacted are least protected.

Consider an analogy if it were applied to the National Disability Insurance Scheme (NDIS). Those most disabled would not be insured and those least disabled would be insured. Reimbursement of scam victims should not be determined by an arbitrary threshold or at the discretion of banks. There should be a reimbursement formula applied equally and fairly to all. This is the approach in other countries.

Reimbursement incentivises banks to protect customers and disincentivises scammers who know they are against the banks. The UK knew reimbursement was the key to scam prevention. Reimbursement should have been a priority for both the regulators and the Government. Instead, they deferred to the banks.