By David Southwell For Daily Mail Australia
13:49 06 Aug 2023, updated 13:49 06 Aug 2023
- NAB joins CBA in blocking crypto transfers
- CBA sums over $10,000 to be stopped
- Moves met with customer backlash
Australia’s crypto community are up in arms as the big four banks move to stop transfers to digital currency sites in the name of ‘protecting customers’ from scams.
Daily Mail Australia reported on Sunday that the Commonwealth Bank has set a strict $10,000 monthly limit on the amount a customer can transfer to crypto exchanges and related sites but this follows similar moves by NAB, Westpac and ANZ.
Digital currency enthusiasts have accused the banks of ‘running scared’ from a competitor that threatens to muscle in on the traditional financial industry.
National Australia Bank announced in July that it would stop ‘transactions made to high-risk cryptocurrency exchanges’ to save customers from ‘a scam epidemic’.
‘If you attempt to make a payment using your NAB Visa credit or debit card to one of these exchanges, the transaction will be declined, and you will be shown a message which says, ‘Issuer Declined Transaction’,’ a Q&A on the announcement said.
Attempting to transfer funds directly or by using a PayID, the payment will lead to a notice of ‘Rejected’ on NAB Internet Banking or the bank’s app.
‘If you still want to make a payment to this cryptocurrency exchange, you’ll need to contact them to see what alternative methods of payment are available,’ the bank said.
NAB does not specify which exchanges will be blocked.
We are doing this to try and keep our customers safe from scams,’ the bank stated.
‘We’ll continue to monitor fraud and scams in relation to cryptocurrency exchanges, including the impact of the changes made, and may make further changes in the future if required.’
Westpac announced in June it has begun trialling customer protections for some cryptocurrency payments to reduce scam losses.
Westpac executive Scott Collary claimed the security measures could save customers millions of dollars.
‘Digital exchanges have a legitimate role to play in the financial ecosystem. But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges,’ Mr Collary said.
‘Often our customers only discover they’ve been scammed after the money has left the country, making recovery extremely difficult.
‘The trial of our new security measures will better protect customers from scams. In particular, it will target investment scams, which have a devastating impact on our customers.’
The other member of the ‘big four’ ANZ said it will block some payments to ‘particular high risk cryptocurrency platforms’.
‘ANZ is continually reviewing and adjusting our capabilities to keep customers safe as new scams emerge and scammers change how they operate,’ a bank spokesperson said.
Meanwhile, the Commonwealth Bank’s $10,000 limit on monthly transfers to crypto exchanges is being rolled out at the start of September – 30 days after customers were notified.
‘We’re introducing new measures to help protect you from scams and fraud,’ the bank stated in emails sent to customers.
‘We may limit the amount you can pay to certain accounts or merchants, for example those we believe to be associated with cryptocurrency exchanges, to no more than $10,000 in total from all of your accounts each calendar month.’
In its revised terms and conditions the bank advises it may ‘suspend or close your account, cancel or suspend your card or other access method’ to stop crypto-associated payments going though.
It can also decline to ‘process or hold the processing of a transaction or dealing, or particular types of transactions or dealings,’ without providing you with prior notice.
Crypto enthusiast and researcher labelled the move as ‘disgraceful’.
‘Just got a notice from Commbank saying all of our Business Accounts will be frozen within 30 days if we buy more than $10,000 in crypto.,’ he tweeted.
‘A Business Account? That’s been doing Crypto Payments for 3+ years?
‘How does this actually help stop crypto scams? Blanket rules don’t help anyone. Disgraceful.’
There were a deluge of comment agreeing with him.
‘The banks are scared,’ one user wrote.
‘They know their days are numbered to defi (decentralised finance) so they think they can bully us out of it.’
‘Clown world. The age of restricting where you can spend your own money is coming lmao,’ another replied.
There was debate over whether a customer could take legal action against a bank.
‘The contract between a bank and it’s customer is voluntary and bank can close it anytime with no reason I’ve been told by a banker,’ one person commented.
Rred Schebesta, the founder of financial services comparison app Finder and self-described ‘Crypto King of Australia’, said while it was important to protect customer’s banks, it shouldn’t stifle the innovation of digital finance.
‘I’m not surprised that the Commonwealth Bank has announced they are limiting transfers to crypto exchanges,’ he told Daily Mail Australia on Thursday.
‘The crypto market cap is estimated to be worth $US1.22 ($1.87) trillion and there is a growing number of people getting into the crypto space.
‘Banks need to be careful not to hinder the evolution of digital finance.’
A CBA spokesperson told Daily Mail Australia the move ‘is all around protecting customers from scam risks that are associated with making certain payments to these crypto exchanges’.
‘Basically it is just meant to help reduce the number and the amount of money lost by customers,’ the spokesperson said.
‘We are doing our best to strike a balance that keeps all customers safe whilst minimising the inconvenience to many.’
Since June, when the Commonwealth Bank first announced the planned measures, it has been holding crypto payments for 24 hours before clearing them.
‘Customers who make payments to cryptocurrency exchanges are currently facing a significantly higher risk of potentially being scammed,’ CBA General Manager of Fraud Management Services James Roberts said after the June announcement.
‘While these measures will not eliminate the risk of customers suffering losses as a result of a scam that involves a payment to a cryptocurrency exchange, they are part of a range of initiatives designed to help customers reduce their risk of falling victim to a scam’.
While the Commonwealth Bank spokesman said the $10,000 is a ceiling that could not be raised, the revised terms and conditions for savings and investments accounts were less clear.
They stated that if a higher requested limit was in place but not used for a period of a month the bank could ‘remove or reduce’ it.
The bank could also reduce a limit or refuse payments ‘if they believe it is reasonably necessary to protect you or us from possible fraudulent activity, scams or other activity that might cause you or us to lose money’.
‘When we do this we will act fairly and reasonably towards you,’ the terms state.
‘We will not be responsible for any loss, cost, expense or other inconvenience you incur.’
This appears to contradict other assurances that when the bank stops payments to crypto-associated entities or reduces limits it will do so ‘without liability to you for any loss or damage’.
While the $10,000 limit is the total sum that can be transferred from the combined accounts a CBA customer holds one Facebook user suggested a way to get around the new rules.
‘I just transfer it to another bank and pay from there,’ they said.
‘Problem solved.’
The move comes after the Commonwealth Bank announced last month it was opening ‘cashless’ branches with customers no longer able to access their money over-the-counter.
Teller cash transactions are not available at branches including Commonwealth Bank Place in the centre of Sydney along with the nearby South Eveleigh, Barangaroo, Penrith and University of Sydney, which the bank now calls ‘specialist centres’.
Daily Mail Australia also understands some ‘specialist centre’ branches in Brisbane and Melbourne no longer permit over the counter cash withdrawals and deposits.
Deposits and withdrawals can still be made via on-site ATMs but for those who don’t have their bankcard handy things get much more difficult.
Last week Daily Mail Australia reported that the Commonwealth Bank can also deny their services to anyone who in ‘their opinion’ is ‘offensive, harassing or threatening to any person’ or ‘promotes or encourages physical or mental harm of any person’.
A Commonwealth Bank spokesperson told Daily Mail Australia the terms were to prevent ‘to address the issue of financial abuse in the context of domestic and family violence’.
‘In 2020, we updated our Acceptable Use Policy to address technology-facilitated abuse and to provide a safer banking experience for customers,’ the spokesperson said.
‘Any customer found to be using NetBank or the CommBank app to engage in unlawful, defamatory, harassing or threatening conduct, promoting or encouraging physical or mental harm or violence against any person may have their transactions refused or access to digital banking services suspended or discontinued’.
Last year Australians lost over $220 million to scammers through cryptocurrency, the Australian Competition and Consumer Commission reported.
The watchdog warned with some scams customers think they are investing in things other than crypto but are asked to pay using that rather than cash.
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