AFCA welcomes government’s new scams prevention framework
AFCA welcomes government’s new scams prevention framework | Insurance Business Australia
Insurance News
AFCA welcomes government’s new scams prevention framework
Government also highlighted the key role of the organisation in preventing scams
Insurance News
By
Jonalyn Cueto
The Australian Financial Complaints Authority (AFCA) has expressed support for the Australian government’s recent announcement to establish a scams prevention framework. This framework, according to a news release, aims to prevent, detect, and disrupt scams while providing consumers with avenues for redress through a newly proposed external dispute resolution (EDR) scheme dedicated to scam complaints.
David Locke, AFCA’s chief ombudsman and chief executive officer, commended the government’s move to address the increasing threat of scams and strengthen consumer protections. “We welcome action from the government to address the immense harm caused by scams, and to fill gaps in the law that make it hard for those affected by scams to access redress,” Locke said.
AFCA’s role in the new framework
AFCA is poised to play a key role in supporting the government’s proposed measures, which include prescribing AFCA as the EDR scheme for scam-related complaints. This initiative extends beyond financial firms to include telecommunications service providers and various digital platform services.
Locke highlighted AFCA’s extensive experience in managing scam-related complaints, noting that the organisation receives more than 100,000 complaints annually. In the 2023-24 period alone, AFCA handled nearly 11,000 scam-related complaints, averaging more than 900 each month.
“As an established EDR scheme, we have experience in managing and resolving scam complaints,” Locke said.
Benefits of the framework
One of the central goals of the new framework is to create a more streamlined process for handling complaints related to scams. AFCA believes that both consumers and businesses will benefit from having mandated internal dispute resolution mechanisms and access to a single “front door” for EDR if a complaint remains unresolved.
Locke emphasised the importance of providing consumers with stronger protections and more effective avenues for redress. “It is important that consumers have greater protections than currently exist and more effective avenues for redress if impacted by a scam,” said Locke.
A call for action
Locke urged industries affected by scams, including banks, telecommunications providers, and digital platforms, to take immediate action to prevent and address scams, even before the framework becomes fully implemented.
“Digital platform services, banks, and telecommunications service providers should not wait until they are required by codes to take action but should now take all actions possible to prevent, detect and disrupt scams, and to provide a fair response to customers harmed by scams,” Locke said.
AFCA also looks forward to consulting with the government on the upcoming exposure draft legislation. The organisation plans to work collaboratively with regulators, industry groups, and consumer advocates to ensure the framework delivers the desired protections.
What are your thoughts on the newly proposed scheme? Let us know in the comments below.
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