Former South Australian senator Nick Xenophon is preparing legal action against one of Australia’s biggest banks, alleging it failed to respond quickly enough to a scam.
- Michael Edwards lost $36,000 after receiving fraudulent text messages
- He gave his bank the scammers’ account numbers but says he has had little response
- NAB says recovering money from scammers is often difficult
Mr Xenophon, now working as a lawyer, is representing Adelaide car salesman Michael Edwards, who lost $36,000 to a sophisticated phone scam earlier this month.
“I believe the bank has breached their duty of care,” he said.
“The clearly don’t have the staffing to deal with this. They should have acted on this immediately”
Mr Edwards lost his money after receiving a Friday afternoon phone call from a man claiming to a be fraud investigator from the National Australia Bank (NAB).
“He said my bank account had been compromised. There’d been three transactions of over $700 tried to come out of my account with cryptocurrency,” Mr Edwards said.
“He said one thing we’ll have to do straight away is cancel those bank accounts you’ve got now and set up a new account.
“I said woah, woah, woah, I don’t know who you are, you could be anybody.”
But the caller showed Mr Edwards he was calling from the NAB’s main number and sent him texts which appeared in the same message thread as official notifications from the bank.
“I’m working for the NAB, I’ll send you something now on your mobile phone saying he was Mark Jacobs from the fraud department, NAB case number and all the rest of it. So to me it looked totally legitimate,” he said.
Mr Edwards followed instructions to transfer the money, all his savings, into two new accounts.
But after the call ended, he was still suspicious, and then spent hours on the phone waiting to talk to a real NAB fraud investigator.
“He said ‘I think you’ve been scammed’ and I just broke down and cried and yelled and screamed,” he said.
Mr Edwards has given his bank the account numbers he sent the money to, but said he has since had only two text messages in response.
“The NAB have never called, never acknowledged what I’m going through,” he said.
“I don’t sleep. I break down and cry at work. It’s the hardest thing I have ever been through.”
A rise in scams
The bank said it could not comment on Mr Edwards’s case, but said it was adding 80 staff to its fraud team and does try to recover customers’ money.
“We’ve seen a significant increase in scams in recent years and it’s upsetting to see the devastating effects these can have on the impacted victims,” Chris Sheehan from NAB’s Investigations and Fraud group said in a statement.
“”We will always make every attempt to prevent these scams and recover funds where possible. However, once the funds have left a victim’s account, it can often be difficult to recover them due to the sophistication of these criminals.”
The NAB also warned customers that scammers could easily set their phones to make it look like they were calling or texting from the bank’s numbers.
But Nick Xenophon said the bank was not taking the scams seriously enough.
“The scam was bad enough – extremely sophisticated and I think that 99.99 per cent of the population would have fallen for it the same way Michael did — but what’s even more shocking is that the bank has really done nothing, has a ‘couldn’t care less’ attitude to this,” he said.
There are calls for banks to held responsible for scam losses and Mr Xenophon said any legal action could have broad implications for the banking sector.
“We could well be looking at a class action. I think there are fundamental questions to be asked not just of NAB but of other banks as to whether they’ve done everything they reasonably should to prevent these frauds and take action once they’ve occurred,” he said.
“I think the banks have failed on both counts.”