https://www.abc.net.au/news/2024-09-12/banks-telcos-social-media-fines-scams-code/104346234
Australians lost a staggering $2.74 billion to scams in 2023, a record high. The government emphasizes that current protections are inadequate and has announced sweeping changes aimed at combating the growing problem of scams. Under the new laws, banks, telecommunication companies, and tech giants like Google and Facebook will be held more accountable for preventing scams and compensating victims.
Key Changes:
- Mandatory Codes: Tech giants, banks, and telcos will be subject to mandatory codes outlining clear obligations to prevent, detect, and respond to scams. Companies failing to comply face fines of up to $50 million.
- Compensation for Victims: Victims can seek compensation from any party involved in the scam – banks, telcos, or digital platforms – through the Australian Financial Complaints Authority (AFCA). Maximum payouts at AFCA are expected to increase.
- Shared Liability: Unlike the UK model, which places primary responsibility on banks, Australia adopts a shared liability approach.
- Tech Giants Targeted: For the first time, Facebook, Google, and other tech companies will be held responsible for scams flourishing on their platforms. This may involve verifying advertisers and taking down scam content.
- Confirmation of Payee: Banks will be required to implement confirmation of payee technology, alerting customers before sending money if the recipient account details differ from their expectations.
- Focus on Money Mules: Banks must identify and shut down accounts used by scammers to receive and transfer stolen funds.
- Phone Scam Measures: Telcos will be pressured to block a higher number of scam calls and texts.
Industry Reaction:
- Tech Companies: The tech sector has previously pushed back on mandatory codes, arguing it’s impossible to prevent all scams.
- Banking Industry: Banks lobbied for shared liability and welcomed the move away from the UK model.
- Consumer Groups: While supportive, some consumer advocates believe the UK’s system placing primary liability on banks would be more effective.
The article highlights the story of Ilya Fomin, who lost his life savings in a scam impersonating his law firm. Despite seeking help from his bank, the money was transferred and could not be recovered. Fomin believes the proposed confirmation of payee technology could have prevented the incident.
The government is working on the specific details of the mandatory codes. Consultation with industry stakeholders is planned. While the new laws are expected to deter scams and offer victims greater recourse, their effectiveness will depend on implementation and enforcement.