Businesses to face $50m fines under new anti-scam laws
The government has proposed a raft of obligations for banks, telcos, and social media platforms to protect consumers.
The government will force banking, telecommunications and social media businesses to step up their efforts in preventing scams or face fines up to $50 million in a bid to protect small businesses and consumers.
According to draft legislation for a new prevention framework, businesses in sectors of high scams activity will have obligations to “prevent, detect, report, disrupt and respond” to scams.
Assistant Treasurer Stephen Jones said the “landmark” legislation would help to make Australia the toughest target in the world for scammers.
“Australians are losing too much money to scams and while we’ve bucked the international trend where scams are doubling every year, losses are still far too much,” he said.
“The way to address that is to put strong obligations on the key businesses within the scam’s ecosystem.”
“We want to ensure that the best protections anywhere in the world are available to people here in Australia.”
The proposed framework is part of the government’s $154 million anti-scam plan and follows the establishment of the National Anti-Scam Centre within the ACCC last year.
Explanatory materials said a new, comprehensive framework was needed to address “piecemeal and inconsistent” scam protections for consumers and close gaps exploited by scammers.
“Consumers face inconsistent protections with differing service providers. While some sectors have industry codes to address scam activity, other sectors have no formal scam protection requirements,” it said.
Businesses that fell within the banking, telecommunications and social media sector would be forced to develop and implement governance policies, procedures, metrics and targets for combatting scams as well as establishing internal dispute resolution mechanisms for victims.
The draft legislation said anti-scam policies must include taking reasonable steps to preventing scams, such as educating consumers, identifying high-risk consumers and providing warnings to them directly.
It said businesses must also take steps to detect and report scams, including identifying potential consumers that are or could be impacted by scams and reporting “actionable intelligence” to the ACCC.
Finally, businesses would have to take reasonable steps to disrupt scams and prevent losses by “stopping payments from successfully being made and preventing any loss to the consumer (such as confirmation of payee for banking services) or preventing further losses where a scam has already been successful, such as removing a fraudulent advertisement associated with scam activity”.
Information about a business’ anti-scam measures and the rights of its consumers would also have to be made public.
Failure to comply could result in civil penalties applying, with a maximum penalty of $50 million.
Minister for Communications Michelle Rowland invited industry members to respond to the draft framework.
“I look forward to our regulators and industry working together to finalise the mandatory industry codes to strengthen protections for Australian consumers,” she said.
“Cracking down on criminals trying to rip off hardworking Australians is a priority for this government.”
Feedback to Treasury on the proposed framework will close on 4 October.
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