Banks have been criticised for letting customers cop 96 per cent of scam losses. 

The Australian Securities and Investments Commission (ASIC) has released a report on scam prevention, noting that the major banks' approach to dealing with growing levels of scams is “inconsistent and narrow”. 

The report indicates that there are low levels of compensation to customers, who are left to bear most of the losses. 

It takes particular aim at policies for determining liability for soaring levels of losses.

ASIC says victims are not always well supported by their banks, despite numerous pledges from all major banks that responding to scams is a major area of focus. 

The regulator found that customers bear 96 per cent of total scam losses across the big four banks. 

In the financial year to June 30, 2022, scam losses reported directly by the major banks to ASIC exceeded $550 million, affecting more than 31,700 customers. 

However, the banks paid a combined total of just $21 million in reimbursement or compensation - less than 4 per cent of the total reported losses.

ASIC commissioner Sarah Court is calling on banks to reconsider the ways they respond to and engage with scam victims to reduce further distress and help them better manage the situation. 

“We'd like to see the banks take steps to evolve their scam management practices, including how they inform and educate customers and help them through what is a distressing time,” she said.

ASIC's new Report 761 will be read closely by the major banks, who are focused on their capability to deal with scams and have invested in anti-scam efforts over the last several years. 

Australian Banking Association CEO Anna Bligh said in a recent article in the AFR that banks wanted to work with telecommunications companies, online payment platforms, banks, and law enforcement agencies “to apply a coordinated and rapid response to scams”.

The competition regulator has said that the overall level of losses from scams was much larger than ASIC's numbers and had soared to $3.15 billion in the 2022 calendar year. 

ASIC's numbers are based on direct reports to it from the banks, while the ACCC uses a broader range of sources, including reports to Scamwatch, ReportCyber, IDCare, and data reported by six financial institutions to the Australian Financial Crimes Exchange.