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This is a joint submission made on behalf of:
• Consumer Action Law Centre
• CHOICE
• The Australian Communications Consumer Action Network
• Financial Rights Legal Centre
• Super Consumers Australia
• Financial Counselling Australia
• WEstjustice
• Consumer Credit Legal Service WA
• Consumer Policy Research Centre

Our organisations are pleased to have the opportunity to comment on the Federal Government’s draft overarching laws to combat scams.

We recognise the challenge of introducing an overarching framework and proposed industry Codes (Codes) across multiple sectors, while scammers continue to innovate, adapt and harm consumers day by day. The SPF can be a world-leading framework, but only if Government recasts the dispute resolution approach so that the burden is off the consumer and the right incentives exist to drive industry action.

Since providing our feedback to Treasury’s December 2023 consultation paper on the Government’s proposed scams regulatory framework, our organisations have continued to support innocent, ordinary Australians whose lives have been destroyed by criminal scams. While we have witnessed a handful of businesses taking some steps towards improving security of their systems to prevent scams, this is piecemeal, and there has been almost no improvement or consistency of banks repaying customers for failing to keep their money safe from scammers.

Right now, Australia is a honeypot – the target of scammers domestically and internationally – with more than $2.74 billion lost to scammers last year, that is far more on all measures compared to other countries such as the United Kingdom (UK).

Our country’s scam response has been left to industry to lead and as a result, it is consumers, not business, that are paying for 96% of scams losses3 and improvements are far too slow to come online, compared with the rest of the world. The absence of regulation has left Australians exposed to substantial harm. The harm is increasing as scammers become far more sophisticated, adopting artificial intelligence, stealing
biometric information and preying on lax security systems in an evolving digital financial system.

Australia has the opportunity within this SPF to aim far higher and become the world leader in preventing and disrupting scams and responding to innocent people and families whose lives are markedly changed by scams. As currently designed, the SPF does not go far enough because:
– it is designed for businesses to take a minimum-standard compliance approach to obligations, rather than
incentivising innovation to keep up with scammers who are always steps ahead; and
– the dispute resolution process is unworkable.

If the ‘Response’ principle were reworked to include a presumption of reimbursement (with limits) and an apportionment mechanism that is business-to-business – this would be world leading, and will significantly reduce both the high number and value of losses from scams, that are wreaking havoc on the lives of countless Australians
and their loved ones.

Read the full submission (PDF).