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Consumer advocates have broadly welcomed the Australian Financial Complaints Authority’s (AFCA) proposed rules and operational guidelines for the Scam Prevention Framework (SPF) but caution the need for greater ambition if victim’s needs are to be made paramount.

AFCA has been designated by the government as the external dispute resolution scheme to manage scam complaints, where they have not been resolved between a consumer and the relevant businesses.  The role will commences in March 2027 when the SPF takes effect.

Ten consumer organisations have made a joint submission on AFCA’s proposed approach, identifying opportunities to strengthen the framework and improve outcomes for scam victims.

“The SPF is a ground-breaking opportunity to deliver fast, fair and straightforward redress for people who have lost life-changing sums to scams and suffered significant harm as a result,” said Pavithra Jayasekera, Policy Officer, Consumer Action Law Centre

”AFCA’s proposed approach to multi-party complaints, its information-gathering powers, the retention of its fairness jurisdiction, and the proposed systemic issues framework are welcome.

”But we know from our frontline data that scam complaints involve unique challenges, including evolving scam typologies and significant information and power imbalances between consumers and regulated entities.

“I believe greater ambition is needed in this new jurisdiction to give full effect to the SPF, or it will fail,” she said.

Ms Jayasekera said that aspects of AFCA’s proposal are too cautious and do not go far enough. Given all stakeholders are entering a new and untested framework, AFCA should equip itself with the strongest possible set of powers and tools from the outset to resolve disputes effectively and fairly.

“It will be easier to recalibrate the framework through future reviews than to undo settings that limit AFCA’s ability to effectively resolve SPF complaints,” she said.

“A central principle of the design and implementation of the scams jurisdiction at AFCA must be putting victims at the heart of the dispute resolution processes. Its policies and processes must minimise the impact on scam victims, who are the victims of serious crime and usually experiencing financial hardship as a result of their loss as well as the psychological impacts of the deception.”

Quotes attributable to:

Carol Bennett, CEO, Australian Communications Consumer Action Network

“AFCA’s proposal is a good start, and we strongly support the increase to compensation limits that reflect the financial devastation that can be reaped on consumers by scams. But this vital anti-scam regime does need strengthening across the board to ensure that victims of crime are not left further frustrated or disadvantaged by a system designed to assist them.”

Rowan Kelly, Senior Solicitor, Consumer Credit Legal Service (WA)

“At CCLS we see firsthand the devasting complexity victims of scams face when trying to recover their losses. The Scams Prevention Framework is a potential turning point to this, but its success will rely heavily on AFCA’s role as the external dispute resolution scheme.

“While we welcome many aspects of AFCA’s proposed Rules, caution needs to be exercised that complaint handling does not become a tick-box exercise. AFCA must equip itself with strong proactive investigation and resolution powers from day one – and deliver a simple, robust process that puts victims first, actively lessens their burden in progressing a claim and does not add to their distress.”

Danielle Walt, Director of Policy and Campaigns, Financial Counselling Australia

“When something goes wrong, consumers should not be expected to work out which organisation failed, chase evidence held by multiple institutions, or navigate a complex complaints process. AFCA’s new scams jurisdiction should provide a simple, accessible pathway to redress and deliver fair outcomes for people affected by scams.”

ENDS

Media contact: Mark Pearce, mark@consumeraction.org.au Tel: 0413 299 567