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If proposed changes are approved, receiving banks will fall within AFCA’s jurisdiction when it assesses complaints involving scam transactions.
The Australian Financial Complaints Authority (AFCA) has opened a public consultation on proposed changes to the rules that govern its work, with a focus on expanding its oversight to include the conduct of receiving banks in scam complaints.
The consultation, which launched yesterday (19 May) and runs until 13 June, seeks to allow the body to investigate the actions of financial institutions that receive funds from scam victims, including the use of mule accounts.
Other proposed changes include requiring paid representatives to use AFCA’s communication channels in an effort to ensure efficient complaint handling.
The amendments seek to improve the effectiveness and efficiency of complaint handling, improve transparency, and lift industry standards, particularly in relation to scams.
The proposed changes place receiving banks within AFCA’s jurisdiction when it assesses complaints involving scam transactions.
For example, AFCA could deal with a complaint arising from a scammer either deceptively assuming the complainant’s identity to open a bank account or deceptively obtaining a bank credit facility in the complainant’s name. If AFCA is dealing with a complaint relating to scammed funds being transferred out of a complainant’s account or credit facility to another bank (or banks), AFCA could then make inquiries of and deal with any complaint in relation to those other institutions.
Other suggested rule changes include allowing AFCA to name non-compliant financial firms, extending existing rules so AFCA can cease dealing with a complaint if the paid representative is not an AFCA member, and the removal of AFCA’s legacy rules section.
As part of the consultation, AFCA is asking stakeholders whether they believe there are any unintended consequences of the proposed rule amendments and what else they should take into account in implementing these proposed changes.
Speaking of the proposed new rules, AFCA’s deputy chief ombudsman June Smith said: “This amendment is a significant step forward in ensuring that all parties involved in the movement of scam funds are subject to appropriate scrutiny.
“It promotes fairness, transparency, and accountability of all banking participants in the transaction chain.
“Engaging with stakeholders through the consultation is vital for refining our processes and ensuring we meet the evolving needs of consumers, small business and financial firms. We look forward to receiving valuable feedback that will help us enhance the AFCA scheme.”
The consultation on expanding AFCA’s remit follows a recent change to the regulator’s authorisation conditions by the federal government. It comes ahead of the implementation of the Scams Prevention Framework, which provides a broader AFCA remit in relation to scams.
According to the National Anti-Scam Centre’s Targeting Scams Report from March 2025, Australians made 494,732 scam reports in 2024, with combined reported losses to scams of $2.03 billion (though this is believed to be an underestimate, as many scams are unreported).
Scams, and cyber scams in particular, are becoming a bigger problem with brokerages, especially vulnerable to certain attacks due to the volume of personal information stored.
Speaking to The Adviser last year, Five Dock Finance’s finance manager Paul Boykos said that he implemented a full security upgrade after seeing a sharp increase in the frequency and sophistication of phishing emails.
“We’re custodians of all of our customers’ most valuable personal information – bank details, account numbers, IDs,” he said.
Borrowers are also typically targeted in financial scams, with landmark occasions such as settlement days resulting in funds being intercepted.
[Related: Brokers warned of heightened cyber scam risk during holidays]
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