Former South Australian senator Nick Xenophon is preparing legal action against one of Australia’s biggest banks, claiming it failed to respond quickly enough to a scam.
Key Points:
- Michael Edwards lost $36,000 after receiving fraudulent text messages
- He gave his bank the scammers’ account numbers, but says he’s had little response
- NAB says getting money back from fraudsters is often difficult
Xenophon, who now works as a solicitor, is representing Adelaide car salesman Michael Edwards, who lost $36,000 to a sophisticated phone scam earlier this month.
“I think the bank has breached its duty of care,” he said.
“They clearly don’t have the staff to deal with this. They should have acted immediately.”
Edwards lost his money after receiving a phone call on Friday afternoon from a man claiming to be a National Australia Bank (NAB) fraud investigator.
“It said my bank account had been compromised. There were three transactions over $700 that tried to come out of my account with cryptocurrency,” Edwards said.
“He said one thing we need to do right away is cancel the bank accounts you have now and create a new account.
“I said woah, woah, woah, I don’t know who you are, you could be anybody.”
Text messages Michael Edwards received from a fake bank employee telling him his card was cancelled. (ABC News: Eric Tlozek)
But the caller showed Mr Edwards he was calling from NAB’s main number and sent him text messages that appeared in the same message thread as the bank’s official notifications.
“I’m working for the NAB, now I’m going to send something to your mobile phone saying it was Mark Jacobs from the fraud department, the NAB case number and everything. So it looked totally legit to me.” he said. said
Edwards followed the instructions to transfer the money, all of his savings, to two new accounts.
But after the call ended, he was still suspicious and then spent hours on the phone waiting to speak to a real NAB fraud investigator.
“He said, ‘I think you’ve been scammed,’ and I broke down and cried and screamed and screamed,” she said.
Edwards has given her bank the account numbers she sent the money to, but said she has since received only two text messages in response.
“The NAB has 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’ve ever been through.”
Increase in scams
The bank said it could not comment on Mr Edwards’ case, but said it was adding 80 staff to its fraud team and trying to recover customers’ money.
“We have seen a significant increase in scams in recent years and it is distressing to see the devastating effects they can have on the victims affected,” Chris Sheehan, from NAB’s Fraud and Investigations group, said in a statement.
“” We will always do our best to prevent these scams and recover funds whenever possible. However, once 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 fraudsters could easily set their phones to appear to be calling or texting from bank numbers.
Lawyer Nick Xenophon is preparing legal action on behalf of Michael Edwards against his bank NAB. (ABC News: Eric Tlozek)
But Nick Xenophon said the bank was not taking the scams seriously enough.
“The scam was bad enough, extremely sophisticated and I think 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 really didn’t he has done nothing, he has not been able to” no matter the attitude towards it,” he said.
There are calls for banks to be held accountable for fraud losses and Mr. Xenophon said any legal action could have major implications for the banking industry.
“We could be looking at a class action. I think fundamental questions need to be asked not only of NAB but of other banks about whether they have done everything they reasonably should have done to prevent these frauds and take action once they have. happened,” he said.
“I think the banks have failed on both counts.”
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