In an effort to combat authorised push payment scams, Australian banks have introduced a new digital platform for reporting fraudulent payments either in transit or transferred to other banks.
The Fraud Reporting Exchange (FRX) platform aims to disrupt the activities of fraudsters by enabling near real-time reporting of scam payments, significantly increasing the chances that funds can be frozen and returned to affected customers. “Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” said Australian Banking Association (ABA) CEO Anna Bligh. “It means more and more scammers are going to hit a brick wall and adds to the arsenal of anti-scam initiatives underway.”
This initiative is owned and operated by the Australian Financial Crimes Exchange (AFCX), which is backed by banks and currently has 17 banks either onboard or in the process of joining. Upon launch, the platform will empower banks to stop multiple fraudulent transactions linked to the same scam, enhance intelligence sharing for loss prevention, and facilitate the streamlined return of funds when feasible.
Early trials of the FRX platform have indicated that the time needed to resolve most scam cases has decreased by more than half. With the new system now active, Bligh emphasizes the importance of consumers reporting any fraudulent or scam payments to their banks promptly. “The sooner that banks are informed about a fraud, the quicker they can take swift action to try to stop the payment before it reaches the scammers.”
Consumer groups have expressed support for the service but argue that banks should take greater responsibility in preventing scams from reaching consumers in the first place and be more proactive in compensating victims of APP fraud. Stephanie Tonkin, CEO of the Consumer Action Law Centre, pointed out that a recent ASIC report revealed major banks reimbursed only 2-5% of scam losses last year. “Until we financially incentivize the banks through mandatory laws, we’re probably not going to see much of a difference,” she stated.