Australians aged over 65 are overwhelmingly the victims of scams, according to the latest data from the federal government’s ScamWatch.

They led both the amount lost to scams in 2023 and the number of reports.

At the same time, people over 65 are far more likely to do their banking in branches.

A UniSA report, commissioned by ANZ in 2022, found 45% of people over 65 used a bank branch compared to 33% of those aged 64 and under.

Branch closures and pandemic force digital shift  

Coinciding with more than 2,100 Australian bank branches closing since 2017, the Australian Banking Association’s customer trends data from 2023 shows the pandemic helped speed the overwhelming shift to digital banking.

The overwhelming majority (98.9%) of total transactions last year were made online and via apps.

In-branch transactions made up only 0.7% of the total, with phone and chatbot services accounting for the other 0.4%.

The ANZ’s Exploring Digital Capability in Older Australians report found 81% of people over 65 had used internet banking in the past 12 months.

Use of mobile banking apps among older Australians was lower at 26%.

The report highlighted concerns about cyber security and ongoing changes to software, websites, and devices were barriers for older people switching to digital banking.

What are banks doing to protect older customers online?

It begs the question: how much responsibility should Australian banks take in ensuring older Australians are equipped to safely carry out their banking online?

The Federal Treasury’s Regional Banking Taskforce in 2022 recommended banks should continue to provide digital literacy support for vulnerable people.

Of the big four banks, three provide a link to the federal government’s BeConnected website, an initiative to provide free digital literacy training among older Australians, including modules on how to detect possible online scams.

But it assumes older Australians have access to a device, the internet, and are digitally literate enough to navigate the websites in the first place.

National Seniors Australia CEO Chris Grice said some older Australians, particularly in the current cost-of-living crisis, simply can’t afford the ongoing monthly cost of a smartphone.

Does the fight against bank scams go far enough?

In November 2023, the Australian Banking Association and Customer Owned Banking Association jointly announced a ‘Scam-Safe Accord’, which promised to put more anti-scam safeguards into the banking system.

Under the accord, major banks will be required to use at least one biometric check for new online accounts by the end of 2024 while customers sending money to new payees will be hit with more questions, warnings, and delays from their banks.

Leading advocacy group for older Australians Council on the Ageing (COTA) welcomed the initiative but said critical gaps remain.

“It’s no secret that far too many Australians are being scammed too often and older Australians often find themselves as victims,” COTA CEO Patricia Sparrow said.

She said older Australians continue to ask for the ability to impose a delay on their own transfers to give themselves an added layer of protection against scams.

She also called for consumer protection legislation to ensure banks protect scam victims the same way they do fraud victims.

Fraud vs scams

Fraud typically involves unauthorised access to personal information without the victim’s knowledge or consent, while scam victims are generally tricked into providing their own information.

Under the current system, bank fraud victims are largely compensated for any financial losses while the vast majority of scam victims are not.

An ASIC review of scam prevention, detection, and responses by the four major banks in April 2023 found bank customers overwhelmingly bear 96% of scam loses.

At the same time, the big four banks detected and stopped “a low proportion” of scam payments, around 13%.

Older people more susceptible to scams

Research from the United States has determined older people are more vulnerable to scams stemming from social, emotional, and cognitive factors associated with aging.

One study in leading psychology journal Front Psychol identified online scam victimisation of older adults as an ongoing social and public health issue that deserves attention, warning strategies to prevent online scams generally may not be effective for older victims.

It also found some older adult victims repeatedly fall into the trap of fraud despite having previous experience of being scammed.

The growing body of research suggests there is no easy way to safeguard older people banking online - except perhaps by providing a non-digital alternative where professional bankers can help carry out transactions and raise any alarms. 

 

Image by Mariia Chalaya on Unsplash