What the Scams Prevention Framework Means for Banks and Financial Institutions

Abstract

The Scams Prevention Framework (SPF) represents Australia's regulatory shift from reactive fraud detection to proactive scam prevention across the financial ecosystem.

For banks and financial institutions, this means addressing scam harm that may originate outside their own systems while strengthening intelligence, detection, and collaboration capabilities.

The Changing Nature of Scam Risk

Scams have evolved significantly over the past decade. Rather than isolated incidents, many scams now involve organised criminal operations that combine several tactics across digital channels.

A typical scam may involve:

• impersonation of a trusted brand or institution
• phishing websites designed to capture login credentials
• social engineering messages sent through SMS, email, or messaging apps
• coordinated campaigns targeting multiple victims simultaneously
• networks of money mules used to transfer stolen funds

Financial institutions often encounter scams at the final stage, when a victim attempts to transfer funds to a fraudulent account. By this point, however, the scam operation may have already interacted with the victim through several channels beyond the bank's direct control.

This is one of the reasons regulators have emphasised a more collaborative and proactive approach to scam prevention.

Banks Often Bear the Loss Without Owning the Brand Used in the Scam

A key challenge for financial institutions is that the brand used in a scam is often not the brand that ultimately bears the financial loss.

Many scams do not impersonate banks at all. Instead, scammers frequently impersonate trusted services such as Australia Post (AusPost), Linkt, myGov, delivery providers, or government agencies. In other cases, scams may not rely on brand impersonation at all, instead using investment schemes, marketplace fraud, advance-fee scams, or other forms of social engineering.

Despite this, the financial consequences of these scams frequently surface within the banking system.

When victims authorise payments to fraudulent accounts, banks become the institutions responsible for processing the transaction, investigating the incident, and responding to customer reimbursement claims. As a result, even when the scam originates outside the banking sector, the operational and financial impact may still fall on financial institutions.

This is also reflected in complaint patterns handled within the financial system, where scam-related disputes increasingly involve banks and payment providers even when the original scam vector sits elsewhere. (Source: Australian Financial Complaints Authority SPF information - Annual Reviews and complaint reporting)

For banks, this means that scam prevention cannot be viewed solely as a brand protection issue. Instead, the Scams Prevention Framework highlights a broader responsibility: managing scam harm that may originate far outside the bank's own digital perimeter.

The Purpose of the Scams Prevention Framework

The Scams Prevention Framework was introduced to strengthen the collective ability of industries to prevent and disrupt scams.

Regulatory explanations of the framework highlight several key objectives:

• improving prevention of scam activity
• strengthening detection capabilities
• encouraging intelligence sharing between sectors
• supporting coordinated disruption of scam operations
• improving responses to scam victims

Rather than focusing solely on individual incidents, the framework encourages organisations to address the systems and behaviours that enable scams to operate at scale.

For banks, this means developing stronger capabilities not only in transaction monitoring but also in identifying and responding to scam signals earlier in the lifecycle.

In practice, the Scams Prevention Framework encourages banks to move beyond transaction-based fraud monitoring toward ecosystem-level scam risk management.

These objectives are consistent with the policy direction outlined by the Australian Treasury, which has emphasised stronger cross-sector obligations and cooperation to reduce scam harm across the economy.

These objectives are consistent with the policy direction outlined by the Australian Treasury, which has emphasised stronger cross-sector obligations and cooperation to reduce scam harm across the economy. (Source: Australian Treasury SPF consultation - consultations led by the Australian Treasury)

For a broader explanation of how the Scams Prevention Framework operates across industries, see our overview of Australia's Scams Prevention Framework.

Key Expectations for Banks Under SPF

While detailed implementation requirements may continue to evolve, the Scams Prevention Framework outlines several operational areas where financial institutions are expected to take reasonable steps.

These expectations generally fall into five broad categories.

Prevention

Banks are expected to consider how their services and systems could be exploited by scammers and implement controls to reduce risk.

This may involve strengthening authentication, monitoring unusual behaviour, and educating customers about common scam tactics.

However, prevention may also require visibility into scams that originate outside the bank's systems, such as impersonation campaigns or phishing websites targeting customers.

Detection

Detection has traditionally focused on identifying suspicious financial transactions. Under SPF, the concept of detection may expand to include broader signals that indicate scam activity.

Examples may include:

• patterns across scam reports from customers
• links between multiple fraud cases
• indicators associated with known scam campaigns
• external intelligence about emerging threats

Improving detection may require integrating signals from both internal and external sources. This reflects a shift toward identifying scam activity earlier in the scam lifecycle rather than relying solely on transaction-level fraud monitoring.

Reporting

The Scams Prevention Framework emphasises the importance of reporting scam activity and sharing relevant information across sectors.

By improving reporting mechanisms, regulators and institutions can better identify trends and emerging scam techniques.

Effective reporting also allows organisations to move beyond isolated incidents and identify patterns that may indicate coordinated campaigns.

Disruption

One of the most significant elements of SPF is the focus on disruption.

Disruption involves taking action to stop scams from continuing to operate.

For financial institutions, this may include:

• blocking suspicious accounts
• preventing fraudulent transactions
• sharing intelligence with industry partners
• supporting removal of scam infrastructure

Disruption can be particularly effective when multiple organisations collaborate to address the same scam operation.

Response

The framework also recognises the importance of responding appropriately to scam incidents and supporting affected customers.

This may include investigating incidents, assisting victims, and working with regulators and industry partners to prevent further harm.

The Operational Challenges Banks May Face

While the objectives of the Scams Prevention Framework are clear, implementing them presents practical challenges.

Many financial institutions have well-developed fraud monitoring systems but may have less visibility into scam activity occurring outside their immediate environment.

Several challenges frequently arise.

Limited visibility into scam infrastructure

Scams often begin with phishing infrastructure, impersonation campaigns, payment-linked scam activity, and social engineering patterns. These elements exist outside banking systems and may not be detected until victims interact with them.

Without external monitoring capabilities, banks may have difficulty identifying these threats early.

Fragmented intelligence signals

Information about scams may come from multiple sources:

• customer complaints
• internal investigations
• industry reports
• external intelligence feeds

Without effective analysis and correlation, these signals may remain fragmented, making it difficult to identify broader scam campaigns.

Difficulty identifying coordinated campaigns

Scam operations frequently target many victims simultaneously. Individual fraud cases may appear unrelated even when they originate from the same infrastructure.

Identifying these patterns often requires analysing data across multiple incidents and sources.

No Single-Brand Model for Scam Detection

Traditional scam monitoring approaches have often focused on detecting impersonation of a specific brand or institution. While brand impersonation remains an important signal, it represents only a portion of modern scam activity.

Many scams today do not centre on a single brand. Some involve marketplace fraud, advance-fee schemes, romance scams, or social-engineering campaigns that do not rely on impersonating any particular organisation.

As a result, relying solely on brand-based detection models may leave significant gaps in visibility.

For financial institutions, effective scam detection increasingly requires understanding scam pathways rather than only monitoring brand misuse. This includes analysing how victims are approached, how trust is established, and how payments are ultimately directed into fraudulent accounts.

Developing this broader visibility into scam pathways may become an important capability as institutions adapt to the expectations introduced by the Scams Prevention Framework.

Why Scam Intelligence Is Becoming Increasingly Important

Addressing these challenges has led many organisations to place greater emphasis on scam intelligence.

Scam intelligence involves collecting, analysing, and validating information about how scams operate. This can include data about:

• phishing domains
• impersonation campaigns
• scam infrastructure
• behavioural patterns associated with scam actors

When analysed effectively, intelligence can reveal relationships between seemingly unrelated incidents.

For example, multiple scam reports may be linked to the same phishing infrastructure or campaign targeting customers of a specific institution.

This kind of insight allows organisations to move from reacting to individual incidents toward identifying and disrupting scam operations more systematically.

Collaboration Across the Ecosystem

Another important aspect of the Scams Prevention Framework is the recognition that no single organisation can address scams alone.

Effective prevention often requires collaboration between:

• financial institutions
• telecommunications providers
• digital platforms
• regulators and government agencies

This reflects the reality that scams operate across a wider scam ecosystem involving platforms, telecommunications networks, and financial systems. Information sharing and coordinated disruption efforts can significantly improve the ability to identify and dismantle scam operations.

This cross-sector emphasis also aligns with the role of the National Anti-Scam Centre, which supports coordinated responses to scam activity across industries.

(Source: ACCC National Anti-Scam Centre - collaboration led by the Australian Competition and Consumer Commission)

Industry exchanges and intelligence-sharing initiatives may play an important role in supporting these efforts.

Preparing for SPF: Practical Considerations

As organisations prepare for the Scams Prevention Framework, several practical considerations may help guide planning.

These include assessing whether current systems and processes support the following capabilities:

• capturing and analysing scam signals
• identifying emerging scam patterns
• monitoring impersonation and phishing activity
• sharing intelligence with partners and regulators
• supporting coordinated disruption efforts

Strengthening these capabilities can help institutions address both operational risks and evolving regulatory expectations.

For a more detailed operational assessment, see Preparing for the Scams Prevention Framework: A Capability Checklist for Banks.

A Broader Shift in Scam Prevention

The Scams Prevention Framework reflects a broader global shift toward more proactive approaches to scam prevention.

Rather than focusing solely on fraud detection at the point of transaction, regulators are increasingly encouraging organisations to address the wider ecosystem that enables scams to operate.

This includes improving visibility into scam infrastructure, strengthening intelligence capabilities, and supporting coordinated disruption of criminal operations.

For financial institutions, adapting to this new environment will require continued investment in systems, processes, and partnerships that support effective scam prevention.

Conclusion

Australia's Scams Prevention Framework marks an important development in the fight against scams.

For banks and financial institutions, it represents both a challenge and an opportunity.

The challenge lies in adapting existing systems and processes to address scams more proactively. The opportunity lies in strengthening the ability to protect customers, reduce losses, and contribute to a safer digital ecosystem.

As scams continue to evolve, institutions that develop stronger capabilities in detection, intelligence, and disruption will be better positioned to respond effectively.

Frequently Asked Questions