Banks welcome proposed scams crackdown
Banks welcome proposed scams crackdown | Insurance Business Australia
Insurance News
Banks welcome proposed scams crackdown
The new laws will target banks, social media platforms, and more
Insurance News
By
Grant Funtila
Australia’s major banks have expressed support for proposed laws that aim to combat the rise in sophisticated scams. If passed, the legislation would place greater responsibility on banks, telecommunications companies, and tech giants to protect consumers losing billions of dollars to criminal networks.
In 2023, Australians were defrauded of $2.7 billion across more than 600,000 scam incidents, highlighting the growing scale of the issue.
Scams are becoming increasingly complex, catching out even savvy consumers. One victim, 34-year-old scientist Ilya Fomin, lost his entire life savings—over $280,000—when criminals impersonating his law firm tricked him into transferring money meant for a property purchase.
“I lost over $280,000. So these are basically all my life savings,” Fomin said. “Now I have a mortgage which will last for an extended period of time.”
The federal government has responded with a proposed legislative crackdown. The new laws will target banks, telecommunications providers, social media platforms, search engine advertisers, and direct messaging services. Organizations that fail to prevent, detect, or disrupt scams could face fines of up to $50 million.
Financial Services Minister Stephen Jones said the legislation represents a significant step in the fight against scammers, providing the competition regulator, the Australian Competition and Consumer Commission (ACCC), with new enforcement powers.
“This is a major uplift. The next phase in our war against the scammers,” Jones said.
Jones also warned that compensation could follow if companies fail to meet their obligations, signaling that not just banks, but telcos and social media platforms, would be held responsible if they allow scams to proliferate.
A key part of the new framework would be the establishment of a single regulatory body to handle complaints and determine compensation for scam victims. This move has been welcomed by the Australian Banking Association (ABA), with chief executive Anna Bligh praising it as a critical measure to combat organized crime.
“We see it as a critical part of protecting Australians from outlaw criminal gangs that are intent on taking their money,” Bligh said.
Currently, Australian banks have internal and external complaints mechanisms, but the proposed changes would ensure that social media platforms, which currently lack such systems, are also held accountable.
In a related development, Jones dismissed recent comments by tech billionaire Elon Musk, who labeled the Australian government as “fascist” for its efforts to counter scams and misinformation on social media platforms.
“This is crackpot stuff,” Jones said. “And for the life of me, I can’t see how Elon Musk or anyone else in the name of free speech thinks it’s OK to have social media platforms publishing scam content, which is robbing Australians of billions of dollars every year.”
The proposed legislation will undergo a three-week consultation period, during which affected sectors, including banks, telcos, and social media platforms, will have an opportunity to respond before the laws are finalized.
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