Is it fair to expect Australian banks to reimburse us if we’ve been scammed?
I recently interviewed an 88-year-old woman who had been scammed out of $49,000. She acted quickly, and presumed the bank would be able to recoup her money.
In her case, she downloaded a third-party app, before logging into her bank account as instructed. She shared the security code with the scammer, enabling them to authorise the transaction before quickly realising she had been duped, hanging up the phone.
She had the account number where the money had been transferred to and an investigation was launched, but despite being a customer at her bank for 60 years, the bank said there was nothing they could do to get her money back.
How scammers operate
Scams are growing increasingly complex and sophisticated. Sometimes pretending to be from your bank, scammers might target you online or social media, or by phone, text or email. If they’re clever, they might give you some information that seems genuine to try and gain your trust, or may suggest there’s a problem to fix, such as a problem with your computer, an overpayment or suspicious activity on your account.
Collectively, Australians lost $2.7 billion to scams in 2023, with online dating and romance, investment, products and services, threat and extortion, employment, and impersonation scams among the most common. Victims are encouraged to report their scam to the National Anti-Scam Centre, but Scamwatch says people often feel ashamed, resulting in around 30 per cent of victims never reporting it.
There has been strong resistance from the banking sector to compensate scam victims. And while Financial Services Minister Stephen Jones has vowed to crack down on organisations that enable scams and don’t pay up, indicating a keenness to ‘redesign fraud out of the system’, banks reimbursing scam victims doesn’t appear to be on the government’s radar.
While the banks put the onus on their customers to ‘hear the alarm bells’, Labor wants scam victims to be compensated under a plan to fine banks and social media platforms $50 million and be forced to pay compensation if they fail to protect customers from scams.
The banks argue against reimbursing scam victims, saying it would create a honeypot effect that would entice criminals to target Australians more often. The other argument is that reimbursing funds lost in scams would make the crime ‘victimless’, making consumers even more attractive to money-hungry scammers.
Currently, if a customer in Australia transfers funds to the wrong account, the bank that sent the money is responsible for dealing with the complaint, rather than the bank that received the funds. The banks are also not obligated to repay scam victims.
Banks educate, not reimburse
Instead, banks have embarked on an education campaign reminding customers to remain vigilant to the threat of scammers, while the recently announced Scam-Safe Accord includes a $100 million investment by banks in a new confirmation of payee system to ensure people can confirm they are transferring funds to the person they intend to.
It’s a far cry from the UK, where most banks already voluntarily compensate customers who are tricked into sending money to scammers, but in a world first, authorities recently mandated that banks must refund fraud victims up to $EU85,000 within five days, unless they are at fault.
As of this month, a new shared liability proposal by the Payment Systems Regulator is expected to impact financial institutions around the world. The system makes both sides responsible for the reimbursement, which is hoped will encourage collaboration between all players to detect and prevent scams.
It’s a policy welcomed by CHOICE and the Consumer Action Law Centre, which wants the government to go a step further and establish a reimbursement model similar to that used in the UK. They work with victims, who often don’t ever emotionally recover from the ordeal.
Who is the onus on?
The Australian Securities and Investments Commission (ASIC) has been clear that banks aren’t doing enough to protect vulnerable customers. Despite this, the banks rely on a tenuous moral argument that suggests that customers will be less attentive and take greater risks if they think they are in line for compensation.
Perhaps Australian banks can take a leaf out of UK’s TSB Bank, which started reimbursing almost all customers who fell victim to scams about four years ago. The bank says the results were stunning, actually resulting in a reduction in fraud.
TSB says voluntarily reimbursing scam victims resulted in its share of losses sitting well below what it would expect for a bank of its size.
Examples of these gestures of goodwill can foster loyalty and trust between banks and their customers, beyond strict legal or educational obligations. While victims can face significant distress, offering reimbursement is an ethical way for banks to support their customers, helping both restore their financial and emotional well-being.
While there is an asymmetry of resources and knowledge when it comes to keeping our money safe, a shared responsibility acknowledges the ethical duty to continually improve safeguards when it comes to scams.
After all, it’s compassionate business practice and a shared burden that strengthens corporate character.
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BY Nina Hendy
Nina Hendy is an Australian business & finance journalist writing for The Financial Review, The Sydney Morning Herald, The Age and The New Daily.
The super loophole being exploited by the gig economy
Imagine what it must feel like not to receive compulsory superannuation – despite it being a mandated part of our employment landscape for more than three decades. For many Australian workers this is a reality.
The Super Guarantee legislates that employers have to pay super contributions of 11 per cent of an employee’s ordinary time earnings, regardless of whether they’re a casual or full time employee.
But the legislation that is meant to protect working rights falls short for an increasingly large group of workers.
We’re referring to the gig economy, which appeared out of nowhere around 2006 when Menulog launched Australia’s first online meal delivery service and has since grown nine-fold to employ as many as 250,000 workers across platforms such as Upwork, Fiverr, Uber and Airtasker.
While the system is providing Australians with flexibility, autonomy and options for an additional source of income, its participants are also being exploited. More than half of gig workers are under 35 and a similarly a large number are international students and migrants who can struggle to get a foothold onto the career ladder in Australia – sometimes due to language or cultural setbacks. It appears nearly two decades later, the super system appears to still be playing catch-up with a changing workforce.
Despite some contractors being eligible to be paid super if they meet the additional eligibility requirements, gig economy workers miss out on the same rights as most working Australians. These workers trade basic workplace entitlements, such as sick leave and holiday pay, for flexibility, and critically, they also miss out on the Superannuation Guarantee, despite the national mandate.
Scratch the surface, and it’s clear to see that a significant loophole exists in current labour force regulations, meaning that most gig workers are likely to be classified as independent contractors.
The superannuation system was built to ensure that Australians can retire comfortably without having to rely on the Government-funded Age Pension, taking significant pressure off government coffers so that funds can be diverted into health, education and other critical infrastructures.
Quite simply, it’s a crime not to pay super. The Australian Taxation Office clamps down on employers that don’t pay superannuation in full, or who fail to keep adequate records. The system works well, and is under constant review as reforms continue to make improvements solely aimed at growing our retirement nest egg.
But despite the removal of the $450 threshold so that workers earning even a small amount from an employer in a month are still eligible for super, the legislation hasn’t yet caught up with the gig economy, creating a deep chasm between the haves, and the have nots.
This is because most gig workers are paid per job, and not as part of a company’s payroll. In the eyes of the Australian Taxation Office, these workers are considered self-employed, or sole traders. As such, any super they put aside for themselves is a choice, rather than a legal requirement.
As a result, gig workers risk falling well short of the super they should have accrued during their working life, bringing about longer term concerns around financial security. For example, if someone worked in the industry for a decade, their super balance upon retirement would dip to $92,000 less than a minimum wage employee. Consequently, gig economy workers are more likely to rely solely on the government-funded Age Pension in retirement.
This disparity raises questions about current superannuation legislation, which doesn’t go far enough to provide protections for all workers.
While Industry Super chief Bernie Dean has made public calls for gig workers to be paid super so they can be self-sufficient in retirement, it has so far fallen on deaf ears.
Fair Work Legislation sets out to close loopholes by creating minimum standards for all workers and proposes a new definition of casual employment, but until all workers earn the same rate of super regardless of how they are employed, it doesn’t look to be all that fair.
So what is our responsibility to those caught in the gap?
Long term disparities about who is and isn’t entitled to Super raises serious questions about inequities in the system and how we consider all types of workers as part of our community and the economy.
While real change comes with policy and regulation, workers do bear some responsibility to prevent inequity falling on them. With many workers in the industry lacking practical information about their rights, education is paramount. Users of the gig economy should seek to better understand industry rules and their options, which starts by asking the right questions: What protections do I have by taking on this job? What are the risks involved? Am I setting up the right fund for myself? And how can I best think about my future self?
And in the meantime, the law might just catch up with consideration for all.
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BY Nina Hendy
Nina Hendy is an Australian business & finance journalist writing for The Financial Review, The Sydney Morning Herald, The Age and The New Daily.
Ethical redundancies continue to be missing from the Australian workforce
Telling staff that they have been made redundant is one of the most difficult parts of anyone’s job. But what’s consistently lacking from these hard conversations is human compassion.
All too often, there are glaring examples of a genuine lack of concern or care being shown by major companies forced to let people go.
Think about it for a second. A person’s identity is wrapped up in what they do for work. After introducing ourselves in a social setting, the next thing we usually share about ourselves is what we do for work.
When Director of The Ethics Centre’s Ethics Alliance, Cris Parker called out the need for a rethink of redundancy done #ethically on LinkedIn recently, plenty of workers chimed in about their own experiences of tragic redundancy stories.
One senior manager revealed he wasn’t even paid a redundancy when being laid off by an Australian company some years ago. Management got around this because the law states that they don’t have to pay redundancy if there are less than 15 employees in the company.
He admits that he still struggles with what happened to him all these years later and wants to see the law changed, admitting that the process was unethical, resulting in people left unsupported and left to struggle financially.
The closed door meeting you didn’t expect
No matter how committed you are to your role, suddenly being made redundant can be an emotionally crippling experience.
But it’s all too common. Media reports reveal that 2023 has been a year of mass redundancies as profits have been squeezed. Nearly 23,000 Australians have been laid off in reported redundancy rounds this year in response to rising interest rates and stubbornly high inflation.
But the real number of actual redundancies is likely to have been much higher as employers only need to notify Services Australia when they lay off more than 15 staff members.
Among the cuts has been KPMG, which announced 200 redundancies in February. Star Entertainment laid off 500 staff in May, while Telstra cut nearly 500 staff in July. The big banks have also been slashing jobs, collectively cutting more than 2000 jobs, according to media reports. There are also examples of companies pushing for staff to leave if they don’t return to the office.
Back in the pandemic, employers were more compassionate in many ways. We saw into our boss’s homes and personal lives and heard about the challenges they were facing. Bonds that haven’t been seen before in the workplace were formed.
At the time, a huge 99% of workers felt that they were working for an empathetic leader in the pandemic, according to KornFerry statistics. This is twice as high than pre-Covid, and it has shaped a new normal that employers need to recognise, even though they may now be facing financial pain amid a much more complex economic time.
Redundancies announced over the lunchroom speaker
Qantas Airways was among the many companies to downsize teams in the wake of Covid, as work was in short supply. In a bid to save a buck, Qantas Airways replaced the ground handling function with outsourced workers, which the Federal Court has since found to be illegal because the airline failed to engage in proper consultation and communication.
In a particularly brutal approach, Qantas reportedly told the 1700 workers about their upcoming dismissal via a lunchroom speaker with no prior warning, which doesn’t demonstrate empathy or compassion.
The case reminds Mollie Eckersley, ANZ operations manager for BrightHR of the US-based Better.com.au CEO who made headlines for making 900 of his staff redundant via an impersonal Zoom call.
She’s the first to accept that making redundancies can’t always be avoided in a bid to keep businesses viable, but cautions that how redundancies are announced to staff can have lasting ramifications on a person.
Approaching job cuts with a transparent, open and empathetic perspective will assist what is already a difficult experience. If not done well the negative impact on the culture is longstanding.
“The Qantas case has highlighted and served a cautionary tale for other businesses considering redundancy plans for its employees. There’s a clear need for robust records – otherwise businesses risk legal action and irreparable damage to reputation. Specific steps must be followed to ensure the process is fair and legal,” says Eckersley.
The rules state that the employer must initiate a meeting with the employee to discuss proposed changes, and that in that meeting, the staffer should be allowed to express concerns, provide feedback and suggest alternatives to redundancy.
But what about the ethical part of this process? People need to be treated with compassion, and giving the employee reasons for letting them go can help soften the blow.
Asking who might like to take a redundancy can be a good first step, because some employees might already have one foot out the door.
Organisations need to ensure they are acting in line with their values. Integrity, care and ethics need to be embedded into the process of making people redundant, particularly when those difficult decisions are made and there are very real human consequences.
This can be done by ensuring that your organisation has a purpose that can inspire those who remain, and be transparent about the reasons for the redundancy, rather than letting them wonder if they might be next.
A great deal of consideration also should be given to the timing of a redundancy announcement. Alternatives to redundancy, such as offering staff shorter working weeks or even reducing pay for a prescribed period of time, should also be considered.
Growing unemployment, mental health issues and the treatment of workers isn’t being addressed by the largest companies using redundancy as a lever amid economic woes, and our government seems intent on allowing the status quo to continue.
We’re all human beings, after all.
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BY The Ethics Centre
The Ethics Centre is a not-for-profit organisation developing innovative programs, services and experiences, designed to bring ethics to the centre of professional and personal life.
BY Nina Hendy
Nina Hendy is an Australian business & finance journalist writing for The Financial Review, The Sydney Morning Herald, The Age and The New Daily.
Who are corporations willing to sacrifice in order to retain their reputation?
In an era where mud sticks like glue, corporate tolerance has waned to such a degree that the need to keep hard-fought reputations is outweighing respect for human fallibility.
Careers and hard-won professional reputations built over many decades can come tumbling down overnight after off-the cuff-comments or even private messages sent to a colleague are made public, overshadowing years of hard work.
And the corporations they work for often seek to condemn, seek a resignation and shuffle talent out the door than chalk it up as an error of judgment, forgive and move on.
Tasmanian Attorney-General Elise Archer was forced to resign after one leaked message to the media appeared to be an exasperated reference to victim-survivors of child sexual abuse. Archer was not given the opportunity to challenge the claims made against her and is adamant that the messages were taken out of context.
Another study found 312 news articles about people who had been fired due to a social media post. These included teachers fired after coming out as bisexual on Instagram, and a retail employee let go over a racist post on Facebook.
While racism was the most common reason workers were fired in these news stories, other forms of discriminatory behaviour included posts about workplace conflict, bad jokes, insensitive posts, acts of violence and even political content. Of course, there’s no doubt of dozens more cases that aren’t even made public.
Are companies too quick to condemn?
The blurred lines between knowingly behaving unethically at work and comments shared without our permission raises the question of whether corporations are too quick to condemn indiscretions in favour of their reputation. While public trust in elected officials is critical, it’s also important to remember that these officials are also human beings.
As workplaces are prioritising accountability and ethical standards to ensure safe and productive environments, too often we are seeing errors of judgement costing hard-working professionals their reputation, not to mention their future earning potential after they are ousted from their job.
It begs the question: What ever happened to an individuals’ right to make a mistake and for the rest of society not to leave them out in the cold forever? Have we come to a point where our inner thoughts and feelings shared in private are indicative of our ability to do our job?
Where we draw the line
Despite private messages being made public costing people their jobs and reputations, career coach Renata Bernarde believes that private messages should remain private and usually aren’t a true reflection of our ability to do our job.
“When leaked, we can see that private messages can offer glimpses into someone’s personal thoughts and feelings, which might be expressed without the filter they would use in a professional setting. That said, if private messages reveal behaviours or beliefs that directly contradict the values and responsibilities of their public role, it’s a valid concern. For instance, a diversity and inclusion leader advocating for equality should not have private messages showcasing prejudice.”
However, Bernarde urges corporations to avoid blanket penalties, saying we need to be cautious about using isolated messages out of context to vilify individuals. “It’s essential to consider the entirety of the person’s character and contributions,” she says.
The art of corporate forgiveness
There are occasional cases of corporate forgiveness. Western Australian man Cameron Waugh was charged with six counts of insider trading and was released on bail. He has since appointed the interim CEO of a company that’s obviously deemed his skills more valuable.
While forgiveness and the opportunity to secure a new job after misconduct is complex and multifaceted, human resources and emotional resilience expert Shane Warren says that it’s important that workplaces acknowledge that making a mistake pertains to the psychological and emotional harm caused by actions that violate one’s deeply held moral beliefs.
“Any doctrine of faith reminds us that human fallibility is an inherent part of our nature, and the capacity to make mistakes is universal. The idea that an individual who has ‘stuffed up’ should not be punished indefinitely for errors resonates with our core principles of fairness and modern desire to embrace personal growth.”
However, Warren admits that balancing the need for accountability with the recognition of our humanity can be challenging. Nevertheless, fostering a culture of learning, growth and restorative justice can help strike a more equitable balance between accountability and compassion in any workplace, he says.
The process of forgiveness and reintegration into the workforce should ideally involve steps such as acknowledging wrongdoing, seeking rehabilitation or counselling, demonstrating genuine remorse and showing a sustained commitment to personal growth and ethical behaviour. The timing for a new job may vary depending on individual circumstances and the severity of the misconduct, he says.
“Perhaps instead, society needs to bear in mind that everyone is fallible. If indiscretions or mistakes happen, when addressed and an apology is allowed to be given, it can lead to greater resilience, better understanding and personal and professional development.”
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