While today's digital environment offers lenders, brokers and borrowers conveniences like never before, it also raises the odds of getting swindled.
"Scams have been increasing — not just in frequency — but also in terms of sophistication," Ben Shapira, a lecturer at Melbourne-based Swinburne University of Technology, told Australian Broker. "And AI has raised the bar a fair bit."
Fraudulent activity comes in many different forms, including email scams, phishing attempts, suspicious links, identity theft, fake financial advice, foreign investments and even scammers making cold calls to potential victims, hoping to gather sensitive information. Lenders and government agencies are responding in kind, many offering updated security measures. In a two-part series, Australian Broker spoke with market players to find out what borrowers and brokers need to know.
"In the loan space, the biggest scam is someone trying to steal your identity," said Shapira, who is also the founder and managing director of Dosh, a digitally encrypted platform that pledges to securely put all of a borrowers' financial data on one platform, which can then be shared with their broker. "But also, there's concern when it comes to stuff like quantum computing, because the sophistication of the encryption is enhanced. And there's other types of scams that aren't in application.
"Scammers will typically go after information that allows them to conduct the most damage," he said. "They'll look for credit card details, login information, access to transactional accounts. There are verbal scams where people will actually contact banks to get passwords reset, or to access critical information by pretending that they're the individuals. This is typically done through phishing, where they get someone to click on a link to fill in a form on a [fake] website that looks like the bank. Then they get access to critical information. And some of that information might be something like your CRN number. But it also could be information like, what is your mother's maiden name? What is your first pet's name? What is your first address? The types of security questions that banks typically ask as fallback methods for you if you want to reset your password.
"And with the advent of AI, if [a scammer] can capture your voice, they can also now contact these big institutions and use AI to pretend to be you. They have your voice as part of that scan process. So if the calls are recorded you don't necessarily know you're not actually talking to a human, but you're actually talking to a bot."
One in 10 Australians fell victim to some type of personal fraud between 2023 and 2024, according to the Australian Bureau of Statistics. The same agency found that the percentage of Australia's population that experienced some type of scam went from 2.5% between 2022 and 2023, to 3.1% during the following 12-month period. That's roughly more than 675,000 people.
The Australian Securities & Investments Commission (ASIC) issued a warning earlier this month, urging consumers to be wary of new investment websites and mobile apps. The agency said it plans to close approximately 95 businesses that are believed to be scams, many of which were operating in foreign currencies or often-complicated digital assets.
“ASIC believes many of these companies were set up with the aim of providing a veneer of credibility," said ASIC deputy chair Sarah Court. “Scammers will use every tool they can think of to steal people’s money and personal information.
“However, these scams are like hydras: you shut down one and two more take its place," she added.
Research conducted by Commonwealth Bank (CBA) in March, found that 60% of Australians surveyed were more worried about scams than a year ago, while data from the National Anti-Scams Centre (NASC) shows that older Australians are most vulnerable to scams. CBA responded by dropping more than $450 million into scam-prevention programs.
"While this is important, so too is raising awareness in the community on how we can protect ourselves,” said James Roberts, CBA head of group fraud.
But CBA isn't alone in its efforts to stop scammers in their tracks. Shapira pointed out that a number of large financial institutions are employing cyber security specialists to protect themselves.
"A lot of these companies are hiring third-party companies also to try and break into their systems," he said. "It's called a pen test, to try and game their system so they can recognize different ways that they may not have necessarily recognized of access in their systems. Some of it might be physical. Some of them might be code based. Some of it might be through these more sophisticated social engineering scams. So it's a constant ebb and flow, between platforms trying to provide service and scammers trying to infiltrate those systems."
"Thankfully, the public awareness is greater [than before]. But it's still occurring, and that's not good," Brown said. "These people that are perpetrating it are criminals, and it pays for brokers and customers to be really, extra vigilant around [cyber security] as we are. We're spending every day looking to protect our customers and their money."
Earlier this year, NAB revealed that it had removed nearly 600 fake NAB-branded websites — websites meant to trick people into revealing sensitive information — from the internet in 2024. The bank said these websites are often realistic and hard to detect that they're fake.
"On average, we request the take down of two malicious websites masquerading as NAB every day," said Laura Hartley, NAB head of security culture and advisory. "We need to make Australia a hard place for these criminals to operate in and that takes a national, coordinated response across banks, digital and social media companies and telcos."
Westpac said it's invested more than $100 million in scam prevention techniques in the last two years. In March, the bank launched SafeBlock, the latest in its arsenal of products to prevent scams.
"We are protecting our customers from the ongoing threat of scams," said Carolyn McCann, Westpac group executive for customer and corporate services. “We’re continuing to introduce new tools to help bring down scam losses. But we need other organizations across Australia to step up and stop scams at the source, so we can shut these criminals down.”
