National Australia Bank Halts A$270M Payments Cites Vulnerability to Scam

The National Australia Bank (NAB) joins other Australian lenders boycotting crypto platforms vulnerable to scams. The decision featured in the Monday July 17 announcement that it was deploying a bank-wide anti-scam strategy to safeguard its customers from crypto-affiliated fraud. 

The move by NAB will involve blocking several cryptocurrency platforms it considers susceptible to orchestrating fraudulent payment schemes. The NAB’s campaign to fight scams is evident with a move to halt A$270 million payment flagged between March-July 2023 as associated with scams. The lender declared a move to unveil blocks on several cryptocurrency platforms to protect its customers from scam schemes. 

NAB Boycotting Scam Prone Crypto Platforms

Although NAB is noncommittal on naming cryptocurrency platforms to face blocks, the boycott seeks to reduce exposure to exchanges characterized by prevalent scams. NAB’s Group investigations and fraud executive Chris Sheehan clarified that boycotting platforms riddled with scams would shield the lender’s customers.

Sheehan considered scammers as featuring both organized and transnational crime entities. He noted that the scammers are leaning towards using cryptocurrency platforms as conduits for the stolen proceeds.

The NAB’s executive signaled that the crypto blocks would consistently replicate the move adopted by other lenders in Australia’s banking industry. The executive remarks hint at the lender’s likelihood to boycott the Binance crypto exchange, whose offices were subjected to a raid by local regulator’s officers. 

Sheehan’s confession portrays an indirect move to replicate the decision by Commonwealth Bank and Westpac to boycott Binance. NAB’s announcement restated the narrative shared by other local banks that almost half of the scam proceeds reported in the country have crypto links. The NAB acknowledges that cryptocurrency scams pose an accelerated security threat that will cost Australians over A$221 million loss in 2022. 

Cautionary Banking Services to Fight Scam

Sheehan indicated that NAB is deploying several cautionary measures, including payment prompts, eliminating links when sending unexpected text messages and a campaign against spoofing. The bank stated that 40% of Australians portrayed extreme willingness to slow payments provided they are better protected against scammers.

NAB unveiled the payment prompts as a checklist allowing the customer to pause and review transactions before approving. The introduction of the feature within the NAB application has seen $290000 transactions aborted daily. It shows that NAB customers are cautious about reviewing transactions before approving the payments. 

Sheehan’s experience as an executive in the Australian Federal Police is paying off to stop the crime before its occurrence. He indicated that simplifying and digitalizing the banking process is necessary. Nonetheless, adding the extra friction serves as an alert to warn the customer. 

The fraud prevention expert revealed that NAB has integrated the anti-scam conversation in improving transactions’ safety. He supports striking a balance between safety and speed within the digital economy. The NAB research indicated four of the 10 Australians prefer slower but safe transactions to avoid scammers. 

Necessity to Debank High-Risk Crypto Transactions

NAB is supporting the boycott as a necessary solution to block payments labeled as high-risk to crypto scams. It draws reference from the discovery by the Australian Financial Crimes Exchange that cryptocurrency-based transactions constitute half of the scams reported in a 30-day run. 

NAB affirmed its membership to the independent initiative and started to assemble law enforcement agencies, businesses and industry groups fighting cybercrime. Sheehan indicated that the initiative is critical to make the ecosystem challenging to host the criminals, thus reducing the impact on the customers who lost over A$221 million to crypto scams in 2022.

NBA Action on Spoofing

Sheehan illustrates that the decision by NBA to partner with telecommunication providers in stopping criminals’ capability to infiltrate phone numbers is yielding impressive results. The approach features utilizing legitimate text messages that exclude links. Doing so reduced the reported cases of NAB-branded spoofing scams by 29% between January and May.  

The fraud investigation executive urged Australians to remain curious, informed and alert that scammers are devising new tactics daily. NAB reminded its clients to contact Scamwatch and the bank upon discovering the scam incident.  

Editorial credit: Nils Versemann / Shutterstock.com

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