News

By Stephanie Tonkin, CEO Consumer Action Law Centre (published in the Herald Sun, 18 March 2024)

Last week, Scamwatch, our national body fighting scams and part of the Australian Competition and Consumer Commission (ACCC), announced that there had been a welcome drop in the reported losses to scams in Australia, down by almost half in the October to December quarter 2023, compared to the same period in 2022.

While this is good news, and good work is being done, we know that the number of people who don’t report these crimes -often because of the shaming victims must endure – is vast. In 2022, the ACCC said that only 13% of victims reported scams to them and that 30% of victims never report what happened to anyone. The $3.1 billion lost by Australians to scams in 2022 is a staggering statistic itself but thought to be a gross underestimate.

What can Australia do now about this crisis? Much more than the minimum standard compliance approach on the table. I believe our inaction on scams is creating a ‘perfect storm’ for people already under siege in a cost-of-living crisis. Scams are exposing the country’s vulnerable banking and communications infrastructure to criminal gangs and turning us into a veritable ‘honeypot’.

Other countries in our region are taking action, and we should follow suit. Earlier this month, New Zealand Commerce Minister Andrew Bayly ordered NZ banks to come up with a voluntary reimbursement scheme by September for customers who have been scammed.

While mandatory reimbursement laws are what’s needed both here and in New Zealand, at least ‘reimbursement’ is on the agenda over there – we’re not even close.

Singapore is also pursuing a “Shared Responsibility Framework” involving banks and communications platforms to preserve confidence in digital payments and digital banking. Meanwhile, the United Kingdom is making reimbursement for people who have been scammed mandatory, coming into law in October.

In Australia, industry is left to work out the rules and they don’t go far enough. The government needs to incentivise industry to protect customers or pay the price through reimbursement.  We are now an outlier and a target and the scammers continue to innovate their methods. They will harness the full potential of AI and, like water, flow through the cracks of our banks and communications security measures.

For hundreds of thousands of people in Australia, this is a devastating crisis. The community expects banks to lift their game and start taking responsibility for their security failures and reimburse their customers.

We need stop placing all the responsibility under the guise of “personal responsibility” on people who have been robbed, and we also want to see banks, telcos and online platforms set up of effective ways to stop the onslaught of scams that are plaguing Australians every day.

We are calling on Assistant Treasurer Stephen Jones to implement measures that have teeth, the highest penalties and genuinely incentivise the banks to increase their investment to protect their customers from being scammed. Bank reimbursement must be front and centre of any new regulations.

ENDS

CONTACT: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au