Need to know
- Scam losses in culturally and linguistically diverse (CALD) communities are up by 60%
- Experts say diverse communities may be less likely to report scams due to a culture-related sense of shame
- Advocates are calling on banks to do more to combat scams and protect victims
Living on a disability support pension, it took Gewa (not her real name) years to save up $4000, which she planned to spend to travel back to her home country of Myanmar to see her elderly mother one last time.
Gewa's plans to travel were put on hold due to the COVID-19 pandemic, and when a friend in the Burmese community told her about an investment opportunity last year, she thought she could grow her savings while she waited for borders to reopen.
Gewa, who is in her 60s and lives in Melbourne's western suburbs, fell for what turned out to be an investment scam. She lost all her savings after she got a friend to help her transfer the money. Her other friends in the Burmese community also fell prey and lost thousands.
I lost everything I had, I was feeling very depressed and it hit me very hard
Gewa, a Melbourne resident originally from Myanmar, who was scammed
"I lost everything I had, I was feeling very depressed and it hit me very hard," she tells CHOICE, through a Burmese translator.
Gewa's bank initially refused to refund her the money she lost. But after some pressure from the WEstjustice community legal centre, which included escalating a complaint to the Australia Financial Complaints Authority, the bank eventually came around.
Banks' responses inconsistent
Joseph Nunweek, the legal director at WEstjustice's economic justice program, says the response from banks varies greatly when it comes to reimbursing people who've been scammed.
"Gewa is one of the lucky ones," he says. "Some banks have been willing to consider the unique hardship and risk exposure circumstances that customers like Gewa face, others have just endlessly kicked the can or not been responsive.
"It's a pity that we don't have consistent approaches across the industry and that people have to hope they chose the right bank for when something goes wrong."
Scams on the rise
Scams across Australia have been on the rise in recent years, but the growth in losses has been more pronounced in culturally and linguistically diverse (CALD) communities like Gewa's, according to an ACCC report. In 2020 alone, CALD communities lost $22 million to scams, an increase of some 60% on the 2019 figures.
CALD communities 'more vulnerable'
Delia Rickard, deputy chair of the ACCC, tells CHOICE these figures, which are only the losses reported to ScamWatch or financial institutions, are probably a gross underestimation.
She says CALD communities are probably less likely to report scam losses than the broader community due to cultural factors and the spectre of shame in small, tight-knit communities.
CALD communities are probably less likely to report scam losses than the broader community due to cultural factors
"Certainly the CALD communities are more vulnerable to some types of scams, we have seen more threat-based scams and visa-based scams," Rickard says. "We see lots of investment-based scams as well, particularly in the last few years. Some of these will be in-language targeting people of a particular community."
Investment and romance scams remain the two biggest reported scam types affecting CALD communities, as well as the broader population. But there are other scams, such as callers impersonating Chinese government authorities, that are specifically targeting migrants, she says.
Chinese authority scam
Qing is a Chinese international student studying law in Sydney. In April this year she was contacted (in Mandarin) by scammers pretending to be from the Chinese social media company WeChat. They then forwarded her on to someone else pretending to be from the Chinese police.
Qing was told her identity had been used in a case of fraud in China, and over several days the scammers tried to get more information out of her, including banking statements. Qing says the scam was sophisticated and that they already had some of her identification information when they initially contacted her.
'I don't want to get into any trouble'
"I was suspicious, but I thought there was the slight possibility that it might be true, although just a slight possibility," she tells CHOICE. "I don't want to get into any trouble or anything."
She says the scammers eventually gave up after Qing grew increasingly suspicious and declined to provide certain information. Qing says she was lucky not to lose any money, but knows it could easily have been different.
"I can see how people would get scared, when you're scared and you're worried you might give them what they want, and especially because you're not in China, there's nothing you can do about it," she says.
People from culturally and linguistically diverse (CALD) communities are more vulnerable to scams. They're often targeted in their mother tongues (known as 'in-language targeting').
Preventing scams and protecting communities
Donna Askew, director of partnerships and community development at Eastern Community Legal Centre in Melbourne, says they have worked extensively in collaboration with local community groups to develop scam prevention and education materials delivered in English and translated into 12 community languages.
"We absolutely do see targeting by scammers preying on vulnerabilities of certain communities," she says.
"People can be targeted across all ages and cultural and socioeconomic backgrounds – but in particular CALD communities, older people, those experiencing financial distress, and people with English as a second language and sometimes lower levels of literacy or unstable visa status."
It impacts people's lives, their ability or willingness to reach out for help, because there is so much shame attached to being scammed
Donna Askew, Eastern Community Legal Centre, Melbourne
Askew says the impact scams have on culturally diverse communities are huge, in part because they're comparatively small.
"There's so much shame associated with [scams], which impacts not only the person, but the broader community," she says. "And it also impacts people's lives, their ability or willingness to reach out for help, because there is so much shame attached to being scammed."
Askew says programs aimed at preventing scams and helping victims should be developed in close consultation with culturally diverse communities.
Labor says more needs to be done
The Labor party last year called for the creation of a National Anti-Scam Centre, which would bring together police, consumer groups, banks, telcos and regulators to combat scams. Labor accused the government of failing multicultural communities and the broader Australian public by not doing enough to stop scams.
CHOICE sent questions to the office of Stephen Jones, Labor's Shadow Minister for Financial Services, asking how the proposed National Anti-Scam Centre would differ from the ACCC's ScamWatch, but we didn't get a response.
Government defends its record
Meanwhile, Assistant Treasurer Michael Sukkar last year said "it's simply untrue to say the government isn't acting when it comes to scams".
"Last year, we implemented the 'Reducing Scam Calls Code', which requires telcos to detect, trace and block scam calls," he says. "We've seen over 214 million calls blocked already as a result.
"The ACCC works with its partners across government and industry to disrupt scams. We'll continue to work with banks, telcos and regulators to support and protect Australians against scams."
Banks need to do more
Gerard Brody, CEO of the Consumer Action Law Centre in Melbourne, says it's not good enough for banks to be deciding on a case-by-case basis whether they help scam victims or not. He called on the government to force banks to be responsible for scam transactions.
"If we had that clearer obligation on banks and obligation to reimburse customers affected by scams, then that would provide a greater incentive for banks to invest in measures at a systems level to detect and prevent scams," he tells CHOICE.
We're taking action, banks claim
But the Australian Banking Association tells CHOICE the banks are already investing heavily in preventing scams.
"Australia's banks work hard to prevent customers from becoming victims of any kind of financial crime, be it internet fraud, phone scams or identity theft, and over the past year, banks have prevented or recovered up to 60% of customers' reported scam losses," a spokesperson says.
Over the past year, banks have prevented or recovered up to 60% of customers' reported scam losses
Australian Banking Association spokesperson
"Over the course of 2021, Australian banks spent around $19 billion on IT systems to build resilience, including against scams. Banks have implemented tools to prevent SIM swap scams, and to detect unusual behaviour such as excessive login attempts. Westpac recently implemented an automatic block on suspected scam purchases that will save customers an estimated $120 million per year."
The association also pointed out that banks provide resources and funding to scam prevention education organisations.
Systemic reform needed
But Brody says that although some banks are doing more than others, this very inconsistency is part of the problem and that industry-wide systemic reform is needed.
"We need a better, more systems-based intervention, like these clear obligations on banks," he says. "Education will always play a role, but I don't think on its own it will work to reduce scam losses."
Rickard agrees that some banks can do more. "I think the banks can do more, some do more than others, but certainly more needs to be done to prevent scams," she says.
Find out more about protecting yourself from scams and reporting scams at ScamWatch.
Stock images: Getty, unless otherwise stated.
