One of Australia’s major banks, Westpac, is taking a proactive stance against cryptocurrency-related scams by launching a trial of innovative scam protection measures. The primary objective of these measures is to safeguard customers from fraudulent activities and minimize potential risks.
Recent data reveals that investment scams account for approximately 50% of all customer losses attributed to scams, and around one-third of scams involve direct transfers to cryptocurrency exchanges, making it challenging to trace the funds. Consequently, Westpac aims to tackle this issue head-on by implementing effective safeguards.
Coincidentally, on the same day, Binance, a prominent cryptocurrency exchange, informed its customers that they can no longer use PayID for Australian dollar transfers to their accounts. The exchange stated that a third-party provider had imposed restrictions on bank transfer withdrawals, causing temporary inconvenience.
While digital exchanges have a legitimate place in the financial ecosystem, according to Scott Collary, group executive of customer services and technology at Westpac, the rise in the use of digital currencies has also attracted con artists who prey on foreign exchanges.
In late May, Westpac plans to initiate a phased trial of the new crypto payment protection blocks. This trial will be introduced alongside other recent initiatives, such as Westpac Verify, which notifies customers of potential account name mismatches when making payments to new bank-state-branch and account numbers or sending money to accounts without prior transaction history with Westpac.
The alarming rise in cryptocurrency scams has prompted consumer advocacy group Choice to report losses exceeding $129 million among Australians. The Australian Consumer and Competition Commission alone received more than 12,000 allegations about these scams in 2021.
Warning flags for cryptocurrency investment scams include false social media adverts, phoney websites, fake papers, and the use of spoofing software.
Scammers may also possess undisclosed personal information or attempt to manipulate targets through phone conversations, heightening the need for enhanced security measures.
With its upcoming trial of scam protection measures, Westpac aims to empower its customers and create a safer environment for cryptocurrency transactions, curbing losses and preserving trust in the financial landscape.