The Federal Government has approved plans to enable the Australian Financial Complaints Authority (AFCA) to consider the actions of “receiving banks” in scam complaints.

The new ministerial direction from Assistant Treasurer and Minister for Financial Services Stephen Jones will empower AFCA to investigate the actions and potential culpability of all banks in the scam chain.

Currently, scam victims can only lodge a dispute with AFCA against the bank which sent the consumer’s funds – that is, the ‘sending bank’.

As a result, AFCA does not have jurisdiction to investigate the actions of a “receiving bank”, where the proceeds of a scam are transferred, and thus can only consider the actions of the bank that has a direct customer relationship with the person or entity lodging a complaint.

AFCA chief executive and chief ombudsman David Locke said the complaints authority welcomed the jurisdictional expansion, which is expected to take 12 months to come into effect.

“This authorisation condition change means that in the future, the actions of receiving banks can be considered as part of the full chain of events in a scam,” he said.

Locke added that AFCA will work with industry and consumer groups over the coming months “to ensure a smooth transition to implement this change”.

The mooted change comes following the release of the National Anti-Scam Centre’s (NASC’s) latest Targeting Scams Report, which showed a 26 per cent drop in dollar value losses to scams through 2024.

Reported scam losses fell by $700 million to $2 billion, whilst the number of scams reported was also down, falling by almost 18 per cent to under 500,000 reports.

The NASC noted that while it was “cautiously optimistic that the combined efforts of government, law enforcement and industry will continue the downward trend”, it recognised an increase in loss reports over the last months of 2024.