Australia Takes a Stand Against Scams: Proposed Controls Aim to Protect Consumers
The Australian government has taken a significant step towards combating financial scams by releasing proposed controls for banks, digital communication platforms, and telecommunications providers to prevent fraud.
Reducing Financial Scam Risk
The proposed framework requires these key sectors to implement anti-scam strategies, share information on scam activities, and strengthen protections against scams. The measures are designed to reduce the risk of consumers falling victim to financial scams, including phishing, online account takeovers, and money mule schemes.
Promising Results Already Seen
According to the Australian Communications and Media Authority (ACMA), the proposed controls have already shown promising results. Since the implementation of the Reducing Scam Calls and Scam Short Messages industry code in July 2022, telecommunications providers have reported blocking approximately: * 1.4 billion scam calls * 336 million scam SMS messages
Penalties for Non-Compliance
The proposed framework also includes penalties for failure to comply with the obligations, which can range from AU$50 million to three times the value of the benefits obtained or 30 percent of the corporation’s adjusted turnover during the breach period.
Ongoing Debate and Review
While the proposal does not explicitly mention reimbursement for scam losses, it leaves open questions on whether the government should establish compensation caps and a clear pathway for compensation in case of breaches by regulated businesses. Industry experts are also debating mandatory controls around online account opening and money mule detection, as well as reviewing the UK Online Fraud Charter to inform the development of the proposed framework.
Praise for Comprehensive Approach
The Australian government’s efforts have been praised for their comprehensive approach to addressing financial scams. The ACMA’s aggressive enforcement of its scam rules and penalties against errant telco providers has also been commended.
Next Steps Ahead
As the proposed controls move forward, it remains to be seen whether Australia will follow the UK Payment Systems Regulator’s (PSR) model on scam reimbursement. One thing is certain – the Australian government’s efforts to protect consumers from financial scams are a significant step in the right direction.
Key Provisions of the Proposed Framework:
- Anti-scam strategies for businesses
- Information sharing on scam activities
- Strengthened protections against scams
- Penalties for failure to comply with obligations
- Potential compensation caps and clear pathway for compensation
Next Steps:
- Review and revisions of the proposed framework
- Implementation of mandatory controls by banks, digital communication platforms, and telecommunications providers
- Ongoing monitoring and enforcement by the ACMA and other regulatory bodies