Companies could face fines of up to $50m for failing to prevent scams and may be forced to compensate victims under new laws the Albanese government says would give Australians the strongest anti-scammer protection in the world.
The government will introduce legislation to federal parliament on Thursday to establish its long-awaited “scams prevention framework”.
Under the legislation, which the government expects will pass parliament, social media companies would be responsible for the first time for scams that occur on their platforms.
“The Albanese government is providing the strongest defences against scammers in the world,” the government said in a press release.
But as the assistant treasurer, Stephen Jones, flagged in September, the government has ignored calls from consumer advocates to follow the UK in making banks solely responsible for protecting consumers.
Instead, designated industries – which include telecommunications companies, social media and banks – would share the liability and face fines of up to $50m for non-compliance.
Complaints to the Australian Financial Complaints Authority (Afca) topped 100,000 for the first time in 2023, and of those complaints, 9,000 were related to scams – nearly double of the previous year. Many complaints related to the handling of scams by banks.
In November last year, 10 scam victims – who collectively lost $1.5m – wrote an open letter to Anthony Albanese that called for Australia to follow the UK’s new rules requiring banks to reimburse victims.
While Albanese government has not met their request, it has promised scam victims “clear pathways to compensation” if the regulated entities fail to take reasonable steps to prevent, detect, report, disrupt and respond to scams.
Jones previously said the shared liability meant if someone was targeted by a scam on social media and lost money from their bank account, the bank and the social media platform could be liable if they failed to put adequate protection in place.
Under the legislation, social media companies, banks and telcos would all need “clear, accessible and transparent” internal dispute resolution mechanisms.
The responsible minister could set rules on how to apportion liability during the internal dispute resolution process to the business or businesses at fault, which the government says would help victims seeking redress.
If a dispute over a scam complaint could not be resolved during the internal dispute resolution process, it could be referred to a new external dispute resolution scheme, which the government has previously said will be operated by Afca.
The relevant consumer watchdogs would also have their powers expanded.
The Australian Competition and Consumer Commission (ACCC) would be able to direct businesses to take specific steps to keep their customers safe from scammers, while Afca would be empowered to resolve consumer claims about scams.
A new system would be set up to share intelligence about scams between businesses and the government, with mandatory reporting requirements.
The Albanese government said it had invested $180m to tackle scam activity and losses to scams had decreased for the first time since 2016.
Australians have lost at least $208m to 198,126 different scams so far this year, according to Scam Watch.
