Cash withdrawal nightmare exposed as Aussies try to win big: 'Blew my mind'

Yahoo

23-04-2025

Australians are being warned banks will likely have to step up their efforts to protect people from scams when customers are withdrawing big sums of cash. There have been two recent cases where Aussies were stopped from taking out their own money to invest it in cryptocurrency.
Westpac and Commonwealth Bank (CBA) told the two separate customers that their requests were raising red flags, and the banks had an obligation to protect their money. Swinburne University's Professor Steve Worthington told Yahoo Finance this isn't something that will go away anytime soon.
"Banks are increasingly bragging about how they're gearing up to avoid scams, but as they get better and better at it, it will mean more and more guidance or governance to us as individuals about how we use our money and how much money we can take out," he said.
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Tim had been banking with Westpac for decades, and he wanted to invest $50,000 into Bitcoin as he felt the cryptocurrency was set for a boom.
However, when he asked for his money, he was rejected. One of the bank's fraud specialists feared the customer was getting duped into an investment scam that sounded too good to be true.
Bitcoin's value surged just after this interaction, and Tim claimed he missed out on a $6,500 win.
Westpac's CEO apologised for the incident and said it would look into how the bank can address situations like this in the future to keep everyone happy.Similarly, CBA customer Andrew Broadbent wanted to chuck $30,000 into bitcoin in August last year.
The Melbourne accountant's transfer request was rejected as the bank thought it was a scam, and CBA asked him to prove it wasn't.
Broadbent had to sell the $21,000 he had already invested through brokerage service Stormrake.
Some investment scams see victims put money into a brokerage account that they have little to no access or control over.
Once enough cash is invested, the scammers usually run off and leave the victim hanging.
CBA reportedly wanted Broadbent to show he had all the autonomy over his money before they would let him invest $30,000 more.
He had to sell the Bitcoin at a loss of $3,000, and he was furious he didn't have more say over what he did with his own money.
'I have over 35 years' experience as a financial and compliance professional, and the whole experience blew my mind," he told The Australian Financial Review.
Finance expert Ben Nash told Yahoo Finance that over the last few months, Aussies have been trying to invest their hard-earned cash in cryptocurrency and the stock market because of how volatile it's been.
That volatility can sometimes produce big paydays.
But he said this is also a ripe moment for scammers who make big promises to easily-duped people.
"The rejection of payments to and from cryptocurrency platforms is increasing and causing issues for more and more Aussies," he said.
"This can create some serious financial problems and downside risks, particularly where people are moving money around to invest, which has been amplified over the last few months given the wild swings and roundabouts in investment markets in Australia and around the world.
"The financial institutions are looking to protect their customers, which is great, but the application of these protections is leaving a lot to be desired."
Worthington added that banks are "damned if they do and damned if they don't" when it comes to protecting peoples' money.
If they ask you questions about what you're doing with the cash, they're being invasive and controlling.
But if they don't ask questions, and you get scammed, they'll be criticised for not doing enough.
"It's a double-edged sword, isn't it?" he told Yahoo Finance.
"We want to be able to access our cash when we want, but at the same time, the banks are very nervous about large withdrawals for what appears to be quite a relatively high-risk investment."
The Australian Banking Association (ABA) represents some of the most well-known banks in the country.
CEO, Anna Bligh, said while questions about what you're doing with your money might be annoying, it's not designed to restrict your financial freedoms.
When it comes to cryptocurrency, banks will have a laser-focused approach.
Cryptocurrencies are one of the most popular sources of investment scams, with Australians losing at least $180 million last year.
"International criminal gangs often utilise crypto exchanges as the getaway vehicle to steal funds," Bligh told Yahoo Finance.
"Once funds are transferred into a crypto exchange, they are virtually untraceable, and the chances of recovery are very low.
"With up to 50 per cent of scam funds estimated to be sent to crypto platforms, banks will protect their customers by blocking or limiting suspect transfers to high-risk crypto exchanges."
Worthington told Yahoo Finance there's no "quick answer" in how to address this burgeoning issue.
He said scammers will keep finding ways to take Aussies' money, and banks will be compelled to do everything in their power to stop it.
Unfortunately, that means if you want to take out even just a few thousand dollars, you'll be asked why and might even be forced to show proof.
But banks may face a PR nightmare ahead, as a poll of more than 3,000 Yahoo Finance readers found 76 per cent felt banks have no right to ask you about your money.
This proves that even though they're trying to do the right thing, they're losing in the court of public opinion.
Worthington's only suggestion is to make sure you're well-researched when you ask the bank to withdraw your own cash, otherwise you could end up like Tim or Andrew.
Even then, it's not a sure-bet that you'll get your cash when you want.Sign in to access your portfolio