Westpac has announced it has commenced trials of a new cryptocurrency scam payments blocker to help prevent customers from transferring money to crypto investment scammers.
The technology identifies and blocks potential payments from Westpac customers to a cryptocurrency exchange that are likely to be directed to scammer.
Westpac head of customer services and technology, Scott Collary, confirmed the technology is designed primarily to target investment scams, which he notes “have a devastating impact on our customers”.
Cryptocurrency exchanges serve as an attractive hub for scammers and scam activity, with cryptocurrency transactions (like Bitcoin or Ether) difficult to track and money sent to exchanges almost impossible to recover.
According to Westpac data, investment scams account for approximately half of all losses to scams, while a third of all scam payments are transferred directly to a cryptocurrency exchange.
Despite recent moves by the Federal Government to increase oversight of crypto assets, the sector remains loosely regulated in Australia. As a result, there are limited protections for those that invest or lose money to a crypto scammer.
“Digital exchanges have a legitimate role to play in the financial ecosystem. But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges,” Collary said.
“Often our customers only discover they’ve been scammed after the money has left the country, making recovery extremely difficult.
The ACCC’s Scamwatch service reports that more scammers than ever are seeking payment via crypto, with losses via crypto payments totalling $221 million in 2022, a 162 per cent increase on the previous year.