ASIC also rejected consumer group demands for the code to protect customers from internet scams.
The competition regulator has found payment redirection scams cost Australians $128 million in 2020, and consumer groups were strongly opposed to ASIC’s proposal to define a “mistaken internet payment” to exclude payments made as a result of scams.
ASIC backed banks that had called for all scams to be expressly excluded from the code.
“We do not consider the mistaken internet payments framework to be suitable to assist in the return of funds in relation to scams,” ASIC said.
“The mistaken internet payments framework is a facilitative framework – rather than a mechanism for allocating liability – designed to assist a consumer in retrieving funds from an unintended recipient.”
There is a fine balance for the receiving [bank] in how far they should pursue the recipient for the full amount of the payment.
— ASIC
For non-scams, ASIC said banks must respond to a mistaken payment “as soon as reasonably possible and, by no later than five business days” to ensure customers maximise their chances of reversing a transaction where they have entered the wrong account or BSB number.
It has not previously stipulated a time frame, which consumer groups said was crucial to trigger a recovery action.
The mistaken payment problem is largely due to banks’ archaic technology. The bulk electronic clearing system (BECS) does not match account numbers with account names, so it does…