$1.6 million Aussie 'mule' scam victim demands major bank change: 'Address these issues'

The government is preparing legislation that could issue hefty fines for banks and telcos that fail to stop scammers from getting through to their customers. But a woman who lost $1.6 million in an elaborate scam has argued financial institutions should reimburse victims so they "have skin in the game".

Harriet Spring was duped into depositing the huge sum into what appeared to be an ING term deposit account. She has welcomed the government's scam crackdown but said banks should have more responsibility for allowing money to move around.

"The scams start with someone setting up a mule account, and they end with the money being deposited in a mule account," she told The Project.

"All scams start and end with the banks.

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"If we incentivise the banks to address these issues, I don't think we'd be having to to to look at all of the telcos and the other ways where they were lured in because the banks would address the security.

"It's just a no-brainer."

A mule account is a bank account used for illegal activities and serves as an intermediary between the scammer and the illicit funds.

It makes it difficult for banks and authorities to track the stolen money when it is sent to multiple accounts from different banks.

Spring's $1.6 million came from the proceeds of her elderly mother’s home.

She said she was groomed by a man for months who eventually convinced her to put the large sum of money into the ING account.

She told her transferring bank that this ING account – who were actually cyber criminals – had told her they used Westpac for “holding” accounts.

Spring explained her mother’s bank went ahead and transferred the money to the scam account in Westpac, despite her mother’s bank later admitting they knew ING did not bank with other financial institutions.

The architect said the bank had denied liability and offered no compensation, despite her mother banking with them for half a century.

Bring Australia in line with the UK

Fellow scam victim Sunni Wan agrees that the banks need to be incentivised to beef up their security to stop scammers from fleecing thousands of dollars from Aussies.

She lost nearly $50,000 to a fraudster who impersonated her bank HSBC and told Yahoo Finance that tougher legislation needed to come in as soon as possible.

“Australia should follow the UK's mandatory reimbursement legislation so that it gives banks incentives to care and protect its customers,” Wan told Yahoo Finance.

“I believe New Zealand will also be implementing this legislation, why hasn't Australia?”

UK scam victims will be reimbursed by their bank from next month if they were tricked into sending over their hard-earned money. But exceptions will be made if the victim was found to have committed gross negligence.

What is Labor's legislation doing about scammers?

The draft legislation is an economy‑wide reform to protect the Australian community from scams – covering banks, telcos and digital platforms.

Companies that fail to meet the obligations set out by the proposed Scams Prevention Framework could face fines of up to $50 million.

One of the measures will require banks to do more to confirm the identity of payees before money is allowed to be transferred to them.

"The Albanese Government is working to make Australia the toughest target in the world for scammers," Assistant Treasurer Stephen Jones said last week.

"New obligations on all of them to ensure that they're preventing, disrupting, reporting and taking the fight up to scammers … Which will ensure they're doing more to keep their customers safe."

But Independent senator David Pocock has expressed concerns that this still won't be enough pressure on banks to act against scammers.

"You read through and talk to people who've been scammed and often they're going to the banks and getting very little assistance," he said.

"Or if they're going to a bank where their money's been transferred, it's, 'Oh, you're not a customer. I can't even deal with you.' And in that time, the money's gone. It's not good enough."

- with NCA Newswire

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How do I protect myself from scammers?

Aussies lost $2.7 billion to scams last year, with 601,000 cons reported to authorities, according to a new report from the Australian Anti Scam Centre.

That's down from a record $3.1 billion the year previous, however, the number of scams reported went up by 18.5 per cent. Over 65s were the hardest hit and only group to take a higher loss in the last year.

Investment scams are the most prolific, with $1.3 billion lost, followed by remote access scams ($256m) and romance scams ($201.1m).

Scamwatch warns to beware of the following scenarios:

• It’s an amazing opportunity to make or save money

• Someone you haven’t met needs your help - and money

• The message contains links or attachments

• You feel pressured to act quickly

• They ask you to pay in an unusual or specific way

• They ask you to set up new accounts or Pay ID

What should I do if I think I’ve been scammed?

Contact your bank and report the scam. Ask them to stop transactions and stop sending any money.

Report the scam to Scamwatch here and make an official complaint to police here.

Watch out for follow up scams, particularly ones promising they can get your money back. Scamwatch warned one in three victims of a scam are scammed more than once.

Lastly, get support for yourself. You can talk to a financial counsellor or reach out to BeyondBlue on 1300 22 4636 or here for an online chat or Lifeline for crisis support online here on 13 11 14.

You can also contact IDCARE to “reduce the harm they experience from the compromise and misuse of their identity information by providing effective response and mitigation”.