The federal government has passed tough anti-scam laws in what potentially was the last sitting week of parliament before a federal election is called.
The Scams Prevention Framework will require designated entities to prevent, detect, disrupt, respond and report scams and attempted scams.
Banks, telcos, and social media companies under the framework will be subject to comprehensive and enforceable sector-specific rules for what they must do to protect Australians.
The rules, yet to be finalised, could include a requirement for social media companies being required to verify advertisers on their platforms to help reduce scam ads. Banks could be required to confirm the identity of payees, and telcos could be required to detect and disrupt scam calls and text messages.
Businesses will have substantial incentive to have ironclad scams defences, with fines of up to $50 million applied on those who fail to meet their obligations.
Victims will have clear pathways to compensation if the business fails to meet robust standards.
Communications minister Michelle Rowland said the framework was part of $180 million in funding to fight scams, including establishing the National Anti-Scams Centre and funding ASIC to bust fake investment websites that promote scams.
“The Scams Prevention Framework will help further strengthen scam defences, and I encourage the telecommunications sector and social media platforms to work with the regulators to develop the enforceable industry codes that will provide Australian consumers the best protection from the scourge of scams,” she said.
“We will continue to protect hard-working Australians from increasingly sophisticated and organised scammers.”
Despite the step in the right direction, advocacy groups say more needs to be done to protect vulnerable Australians from being scammed out of millions of dollars.
“This legislation is an important step towards ensuring that consumers who have experienced the trauma of scams and lost their hard-earned money can more readily seek redress,” Carol Bennett, CEO Australian Communications Consumer Action Network, said.
“We are disappointed that its stops short of ensuring compensation or a presumption of reimbursement but look forward to working with consumer advocates in the coming months to make sure the legislation better reflects the needs of consumers.”
Reporting from the Australian Competition and Consumer Commission (ACCC) found that between 2020 and 2022, scammers stole more than $3 billion from Australians.
The ACCC, who manage Scamwatch, the national anti-scam centre, said individuals have said the cost for too long.
“While the steps taken by some organisations over the last few years are welcomed, the Framework provides the opportunity for joint effort across government and industry to develop solutions to scam challenges and for consumers to access meaningful redress,” ACCC Deputy Chair Catriona Lowe said.
“Importantly, the Framework enables consumers to seek redress from regulated businesses when those businesses have not met their obligations,” Ms Lowe said.
Drew MacRae, Senior Policy and Advocacy Officer, Financial Rights Legal Centre said consumers groups and legal community groups would be watching the legislation closely.
“Australians desperately need government and industry to act on the ongoing scams crisis. While the legislation lacks a clear reimbursement element, we welcome its passing since at the very least it will incentivise banks and other players to take real steps to address this problem,” they said.
“We will be closely watching the impact of these laws on scamming victims over the next few years to make sure banks, telcos, social media step up and provide improved and more consistent responses to scam losses.”