AFCA has opened consultation on proposed changes to its rules to expand its jurisdiction to include the conduct of receiving banks in scam complaints even though the complainant may not have a customer relationship with the bank. Background.
The change will allow AFCA to investigate the actions of financial institutions that receive funds from scam victims, including the use of mule accounts, in considering scam complaints.
AFCA will have jurisdiction to investigate:
1) an account opened, or credit facility made available, by a Bank in the name of the Complainant where the complaint is that the account was opened or credit facility was made available:
(I) without the Complainant’s consent; and
(ii) as part of an attempt by someone to deceive the Bank or the Complainant,
or
2) the receipt, internal movement or external transfer of funds by a Bank (Bank A) that involves whether directly or indirectly:
(I) an account or credit facility in the Complainant’s name, either with Bank A or another Bank, and
(ii) an attempt by someone to deceive a bank (whether Bank A or another Bank), or the Complainant, and whether or not successful.
Currently if a scam related dispute with a Financial Firm is escalated to AFCA, its Rules and jurisdiction limit it to only being able to deal with the Financial Firm of which the scam victim is a customer, and not another Financial Firm that has been used by the scammer to facilitate the scam, such as a receiving bank.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
