To help protect Australian consumers from costly scams and the fraudulent behaviour of cyber criminals operating them, the Australian government yesterday passed the Scams Prevention Framework Bill 2024 (SPF) into legislation.
The new framework puts the onus back on businesses rather than individuals who have been bearing the brunt of responsibility to combat scammers.
For example, designated entities like banks, telcos, and social media companies are required to become more vigilant about detecting and disrupting scams and reporting scam activity, which last year alone cost Australian consumers over $318m.
To reduce scam activity, which in 2024 exceeded 250,000 reported incidents, Australians reported almost all scams, new arrangements require banks to verify the identity of payees while social media is required to verify advertisers.
Comply or face potentially hefty fines
Failure by businesses to provide adequate measures to defend against scams could potentially face up to $50 million in fines.
Assistant Treasurer and Minister for Financial Services Stephen Jones has encouraged the telecommunications sector and social media platforms to work with regulators to develop industry codes to protect consumers from increasingly sophisticated and organised scammers.
The legislation would “give Australia the strongest defences against scammers and put us ahead of the world in scam prevention and protection,” said Jones.
“These new laws will keep Australia one step ahead of criminal scammers.”
New powers for the ACCC
The Scam Prevention Framework is expected to prescribe consistent and enforceable obligations for businesses in key sectors where scammers operate.
Under the new legislation, the Australian Competition and Consumer Commission (ACCC) will closely monitor regulated entities’ compliance with principles to prevent, detect, disrupt, respond to and report scams.
The new SPF framework authorises the ACCC to investigate potential breaches and potentially take enforceable action if organisations haven’t taken reasonable steps to fulfil their obligations under the new guidelines.
Banks, certain digital platforms, social media, and telecommunications providers will be the first sectors required to comply with the legislation.
It’s understood that the National Anti-Scam Centre – which started on 1 July 2023 - has already begun preparing incrementally for the new Framework.
Sitting inside the ACCC, it brings together experts from government, law enforcement and the private sector to analyse and act on trends from shared data and raise consumer awareness about how to spot and avoid scams.
The Australian Securities and Investments Commission (ASIC) will be the regulator for the banking sector code and the Australian Communications and Media Authority will be the regulator for the telecommunications sector code.
Regulators have in place processes to work together to help ensure the right action by the right regulator at the right time.
