Customers have been left confused by banks asking for their personal details over the phone or in emails, which they say contradicts advice to avoid being scammed.
The federal government's anti-money laundering and counter-terrorism laws, introduced in 2016, require banks to update clients' details every two years to make sure they know who they are opening bank accounts for.
However, there has been pushback from consumers who say the emails and phone calls look and sound like a scam.
The ABC has seen an email one customer received from their bank.
WA Consumer Protection Commissioner Trish Blake said she was unhappy with the banks' methods of collecting personal details.
"I agree it very much looks like a scam," she told ABC Radio Perth.
"I am still going to say to all the listeners, do not give your details over the phone, and do not click on links in an email."
She said some banks would ask a client to go into their app to update their details and that was the safest option.
"If you've got a banking app, go there because they should absolutely have functionality in the app that will allow you to update your ID documents there. If they don't, then go into the branch," she said.
Ms Blake said she planned to write to the banks and the Australian Banking Association to say they needed to get smarter in the way they obtained information from their clients.
"I'm going to be writing to some of those banks or to the banks' association to ask them to fix up their game in terms of how they are asking consumers to confirm their ID," she said.
'Waste of time'
Financial writer Noel Whittaker spoke to ABC Radio Perth about his experience having to update his details with businesses he had been with for years.
He said the Know Your Customer law was a "weed plaguing the financial system".
"It's just a total waste of time and it costs so much money and so much time and doesn't do one thing to stop fraud," he said.
As a result of Mr Whittaker's experience, he would like to see the law changed.
"These laws are supposed to stop scammers and bad people, but they don't stop them," he said.
Caller Troy told ABC Radio Perth that he worked in a bank and they were in a catch-22 situation.
"I recommend clients don't answer or don't ID themselves from the inbound calls," he said.
"But at the same instance ... we're required to call 20 clients a week and understand if they need any assistance and make sure their existing banking is working OK for them."
