I contacted my bank to report a scam purchase. Why didn’t it cancel the transaction?
I contacted my bank to report a purchase as a scam when, on viewing my bank record immediately after the transaction, I saw that it was a pending payment to an overseas account. (I had bought what I thought were legitimate products – linen, towels etc – through known Australian outlets.)
The bank refused to cancel the transaction and subsequently requested documentation, such as receipts, that I could not obtain. I understand that very few scams are addressed, but if the bank had acted immediately I would not have lost my funds.
Can you advise me please?
– Dawn, South Australia
Kat says: Scams are prolific in Australia, and they’re becoming increasingly elaborate and difficult to spot. A Choice survey conducted in July 2023 found that 52% of Australian consumers who responded believed they were being targeted by a scam every week. A further nine out of 10 said they suspected that they’d come across a scam in the preceding year. It’s estimated that Australians lost around $400m to scams in 2023.
I’m sorry this has happened to you – know that you are not alone and that you’ve done all the right things since realising you were scammed.
As scammers are becoming increasingly sophisticated, deceptions are harder and harder to spot. In your case, it sounds like you might have shopped on a fake or cloned website of a store you are familiar with. Scamwatch has some good resources on how to spot scams, but these aren’t foolproof and the onus is certainly not on you as a consumer to avoid becoming the victim of a crime.
It’s great that you managed to spot the scam straight away, and you did the right thing by contacting your bank immediately. It’s an absolute shame that the bank didn’t act quickly enough, and put the onus back on you to provide further evidence.
While it should be common sense that a transaction to an account you didn’t expect to see on your bank statement is likely to be a scam, banks often balk at taking responsibility for canceling those transactions where they are technically authorised by you. Choice reports that scam victims often have difficulty dealing with their financial institutions after identifying a scam. Choice says: “While you’re likely to get your money back if it was taken out of your account without any action on your behalf, this isn’t the case with bank transfers you’ve initiated yourself.”
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Banks in Australia aren’t legally required to reimburse you for money you transferred to scammers yourself. That said, Australian regulators such as Asic and the ACCC recommend contacting your financial institution as the first step after you realise you’ve been scammed. You’ve done this, and found that your bank didn’t act in a way that mitigated the harm you were experiencing.
I’m not going to sugar coat it – because there is no legal obligation on your bank to reimburse you, it’s going to be a slog to get them to help you in a way you will be satisfied with.
If you cannot reach a resolution with your bank, I suggest making a complaint to the Australian Financial Complaints Authority, which will undertake that process for you. The ACCC also suggests getting advice from a financial counsellor “if you believe your bank has acted inappropriately during this process, or is responsible for your loss”.
Making a complaint against the bank might help spur some remedial action for you but, until there’s serious regulatory reform in Australia, consumers are really up the proverbial creek without a paddle when it comes to scams (which is definitely not OK).
There are some other steps you can take to both make yourself feel better and protect yourself too, and they can also help others avoid the same scam.
Firstly, you need to ensure your personal information is protected. ID Care can help you with this. ID Care is a not-for-profit, free-to-access service that helps the victims of scams make plans to ensure there’s no further harm, including helping you to secure your personal information.
You should also report the scam to Scamwatch, where it will be analysed by the Anti-Scam Centre. Scamwatch identifies trends and figures out how widespread certain scams are, which in turns leads to better regulatory actions and interventions – but only if scams are reported. You can also make a report to ReportCyber, which is run by the Australian Cyber Security Centre and shares reports with police.
Because your experience was with an online retailer, you might also want to leave reviews wherever you can, to help other consumers avoid the same scam. Choice suggests Google and Trustpilot.
In the meantime, watch out for follow-up scams. If scammers have your details, they might try to double dip – so keep an eye out for anything suspicious that comes your way.
Choice says: “Finding out you’ve been scammed can be nothing short of devastating. Scam victims have … [described] the emotional toll the experience has taken on them and their families.”
It’s important to note that support is available if you’re struggling in the aftermath of a scam.
The ACCC’s Scamwatch suggests talking to a financial counsellor if a scam has created or is contributing to problems with debt, reaching out to family and friends for emotional support, or if you are experiencing distress, contacting Lifeline or Beyond Blue for further support.
This letter has been edited for clarity.
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