NAB bans some crypto payments

Amid a surge of cryptocurrency scams across Australia, National Australia Bank (NAB) has implemented measures to block certain cryptocurrency payments in order to protect its customers. The bank’s decision, announced on Monday, involves prohibiting payments to “high-risk” exchanges as part of new customer protections.

According to NAB, nearly half of all scams reported to the Australian Financial Crimes Exchange in a recent 30-day period were linked to cryptocurrency. The bank highlighted that cryptocurrency scams pose a significant security threat in Australia, with consumers having lost over $221 million to such scams in 2022 alone.

Chris Sheehan, the executive overseeing NAB’s group investigations, explained that these scammers are part of organised transnational crime groups that increasingly utilise cryptocurrency platforms to swiftly transfer stolen funds, often overseas.

In a broader announcement, NAB revealed that it had intervened in over $270 million worth of customer payments due to scam concerns between March and July of this year. The bank noted that when customers received real-time payment prompts on the app, 12% of payments were abandoned.

Furthermore, NAB’s collaboration with telecommunications companies to prevent fraudsters from infiltrating phone numbers and legitimate text message threads led to a 29% decrease in reported NAB-branded spoofing scams between January and May.

NAB’s move follows a similar decision by Commonwealth Bank of Australia, which recently began declining or holding certain payments to cryptocurrency exchanges for 24 hours. Additionally, Commonwealth Bank intends to impose a monthly limit of AUD 10,000 (approximately $6,700) for customer payments to cryptocurrency exchanges.

James Roberts, the General Manager of Group Fraud Management Services at Commonwealth Bank, explained that these measures aim to reduce the number of scams and the financial losses incurred by customers, considering the rising prevalence of scams and the significant losses suffered.

As fraud becomes increasingly sophisticated in the digital age, financial institutions are grappling with the evolving challenges. While fraud rates were at their lowest in 2021, impacting 65% of organisations, new avenues for fraud have emerged, including a 13% increase in FinTech fraud in 2022.

Identity fraud poses a significant threat, with almost half of all FinTechs affected by the use of counterfeit documents. The financial industry’s response to these challenges will require ongoing vigilance and adaptability as fraudsters persistently seek and exploit vulnerabilities in defences.