Fast Settlement Services alone cost Australians $1bn lost to scams in 2022.

How T+2 can solve many of the large-scale scams.
“The Treasurer and the Governor of the Reserve Bank must immediately move to change the requirements of the FSS, that any new transfer on a customers account be held for 48 hours or what is known as T + 2.”
Fast payments are robbing us of billions?

Speaking at the Scam Summit in Sydney this week made me realise that although scams are widely known, the solution is not.

At the Summit I provided empirical evidence that the introduction of Fast Settlement Services (real time payments) has a direct link to the massive increase in moneys lost to scams since its introduction in 2018. (please see graph at the top of the story)

And what’s more Australia is not an isolated example of this, more on this below.

JIM CHALMERS, TREASURER recently said “Let’s be blunt. Our regulatory frameworks and infrastructure have not kept up with the big trends and transitions happening in finance — especially when it comes to the digital economy and payments.“

 So Minister, you and the RBA can mandate T + 2 with the stroke of a pen, lets see if you walk the talk.  

The NPP (New Payments Platform) has been revolutionary for businesses in Australia and was heralded by the Reserve Bank of Australia at the time of its launch.

However instant payments provide scammers with an ideal environment to carry out their illicit activities due to several key factors. 

In the 10 years between 2009 and 2019 Australians reported losing $2.5 billion to all scams

And by 2022 (four years after the introduction of the FSS) and in only one year, Australians lost $1.5 billion to Investment Scams and 3.1bn overall

In the ten years leading up to the FSS we saw a combined 10 year loss of $2.5bn.
And then five years later after the introduction of FSS we lost the equivalent to the previous 10 years in only 10 months.   

What is blatantly clear to me is that more needs to be done, and it needs to start with the Australian Government and the Reserve Bank who played a significant role in establishing the broad direction of the industry’s efforts.

The RBA built the settlement component of the NPP, known as the Fast Settlement Service (FSS), which allows transactions to be settled individually on a 24/7 basis, in close to real time. The Bank is also a participant in the project, with its Banking Department using the NPP infrastructure.

Launched in February 2018, the New Payments Platform (NPP) was lauded as open access infrastructure for fast payments in Australia. The NPP was developed via industry collaboration to enable households, businesses and government agencies to make simply addressed payments, with near real-time funds availability to the recipient, on a 24/7 basis.

Banks have a range of data and tools available to try and detect a customer transaction that may relate to a scam. They also have partnerships, including with the Australian Financial Crimes Exchange (AFCX), where they share intelligence on scams. Once suspicious activity is identified, banks can take steps to stop scam transactions from proceeding. For example, the bank can notify and make further inquiries of the customer before completing the transaction.

In April 2023 ASIC released Report 761 noting:-

“Historically, high value transactions have usually been conducted through an assisted service channel, such as in a branch or by phone.

This gives bank staff the opportunity to identify unusual transactions— such as those consistent with scam typologies—and to make inquiries with the customer before executing the transaction.

Among other benefits, the move to digital payment channels has made it quicker and easier for customers to make payments.

However, it has also increased the speed of moving scam proceeds, and reduced the opportunity for banks to identify and intervene in some types of scam transactions.

In this environment, banks should consider the benefits that appropriately designed levels of friction may offer, to allow:


  • customers more opportunity to identify that they have been the victim of a scam and enable them to seek recovery of the funds before the funds leave the bank, and
  • the bank to make reasonable inquiries with their customer, if the bank is on notice that the transaction may relate to a scam.”


The ASIC report also noted:


  • ‘During the period 1 July 2021 to 30 June 2022, a total of $845 million in scam transactions were made by customers across the four major banks. Of this, around $109 million in payments were detected and stopped by the banks (approximately 13% of scam payments).
  •  The proportion of payments detected and stopped by each individual bank varied between 5 and 18%. There are a range of factors to explain the difference in detection rates, such as differences in data quality or recording, the way that products and services are provided, and the operation of scam and fraud prevention systems.’

This is utterly unacceptable. The banks only stopped between 5 and 18% of financial scams that occurred on their platforms.

Between 1 July 2021 and 30 June 2022, more than 31,700 customers of the four major banks collectively lost more than $558 million through scams. This was an increase of 49% in customers and 50% in financial losses compared to the previous 12-month period. During the same period, banks paid approximately $21 million in reimbursement and/or compensation payments to customers who fell victim to a scam.

 As scams are increasing in volume and sophistication, causing significant financial and other harm to Australian consumers, including the most vulnerable people in our community. It is absolutely incumbent upon the banks that they immediately act to mitigate this scam epidemic.

As such the Treasurer, Assistant Treasurer and the Reserve Bank must immediately move to change the requirements of the FSS that any new transfer on a customers account be held for 48 hours or what is known as T + 2.

This would stop a vast majority of the Phishing Scams that are affecting customers and save almost $1 bn of lost savings from vulnerable Australians. 

So lets see if Australia is an outlier in terms of scams and use of FSS, lets look at Singapore.

 And now the UK.

and Hong Kong

So its very clear that in every jurisdiction that Fast Settlement Services have been introduced the increase in losses to scams is linear to the adoption of the service.

After organising a meeting with Assistant Treasurer Stephen Jones office last month, to open a dialogue with his department and the ACCC, I realised the Government had a very limited understanding on how to tackle the scam epidemic, and also no clear plan to help the Australian’s who are being impacted every single day.

What was even more alarming to me, was that the Government were not aware that online marketplace scams had risen to the level of the financial phishing scams, and they didn’t know of Lloyds Banking Group’s recent announcement that eight of out ten scams the bank was seeing were online marketplace scams. 

With Sell Securely’s Scam Report showing that almost every second Australian had been scammed financially at some point in time, this is not enough. This action is not wide reaching and it is certainly not talking to the 25.69 million Australians who desperately need to be educated on what to do to protect themselves from the scam epidemic. Needless to say, I was disappointed with the outcome of my meeting with the government, and I truly believe they are attempting to put out a bushfire with a garden hose. 

To help reduce the incidence of scams, the Government and the RBA have a duty of care to undertake an extensive advertising campaign to educate Australians. 

One Australian bank created a campaign for scam awareness targeted at older customers. This bank prepared educational material targeted towards customers over the age of 70 years old and developed a guide to help older people avoid scams and established a dedicated scams team focused on customers in this age group. 

This bank reported that from November 2020 to February 2022, its dedicated team had successfully declined or prevented $32.6 million in scam transactions for this customer demographic. The evidence is in the numbers. 

As was indicated in Sell Securely’s Scam Report, a staggering 98% of Australians believe more needs to be done on education with a similar number saying that more needs to be done to combat the issue at hand. 

The challenge is, this isn’t a one-solution problem. Outside of education, the Treasurer, Assistant Treasurer and the Reserve Bank must immediately move to change the requirements of the Fast Settlement Service (FSS), so that any new transfer on a customer’s account be held for 48 hours or what is known as T + 2. I believe that this will protect consumers from the pressure scammers prey on when it comes to instant payment transfers.

Although instant payments and the NPP (New Payments Platform) has been revolutionary for businesses in Australia and was heralded by the Reserve Bank of Australia at the time of its launch, this has also provided scammers with a fertile environment to carry out their illicit activities due to several key factors:


  1. Lack of Verification Time: Instant payment systems bypass the traditional banking processes, allowing scammers to quickly receive funds before any fraud detection mechanisms can be implemented. 
  2. Anonymity: Instant payment platforms often prioritise convenience over identity verification, enabling scammers to remain anonymous. They can create multiple fake accounts or use stolen identities to receive funds without leaving a trace.
  3. Impulsive Nature: Instant payment platforms cater to the desire for immediate gratification, encouraging impulsive transactions. 
  4. Limited Recourse: Unlike traditional banking systems, instant payment platforms often lack robust customer protection measures.
  5. Global Reach: Instant payment systems have a vast global reach, allowing scammers to target victims worldwide. 

The time is now for change. The time is now for action. Let’s put an end to scams, and put that money back into the pockets of the Australians who are the victims of this enormous issue.