Zoe Daniel (Goldstein, Independent) Share this | Hansard source

Scams don't just rob Australians of their money; they rob Australians of their peace of mind, trust and dignity. Being the victim of a scam can be a devastating experience that ripples through families and communities, creating untold suffering and leaving immense damage in its wake.

Our country has become a honey pot for scams. Last year alone, a staggering $2.7 billion was stolen from Australians by scammers. Small businesses remain particularly vulnerable to scams, with the Australian Competition and Consumer Commission highlighting that small and micro businesses lost over $13.7 million to payment redirection scams in 2022, a 95 per cent increase from the previous year, constituting a significant proportion of total business scam losses.

These scams exploit digital vulnerabilities, leaving businesses exposed to financial and operational risks. This is an issue that requires urgent attention and a solution that will protect all Australians from the scourge of scams. This is a transnational criminal industry that extends far beyond our borders, and it requires an immediate and effective response.

The devastating consequences of scams cannot be understated. I hear stories about scams all the time in my own electorate. I'm especially haunted by one story. It's about a man in his 70s, an immigrant, who came to Australia decades ago and built a life here then was caught in a series of scams that took nearly everything he had. He had saved for his family and for his children and grandchildren, but over time, as he found himself widowed and living alone and vulnerable, he fell prey to a series of calls that seemed so convincing. They promised him higher returns, security for his future and companionship. He trusted them, and in return he was stripped of his life savings. Now, at nearly 80, he is contemplating finding a job because his retirement has been stolen. This isn't an isolated story. It's a shared experience for countless Australians, and that's why we're here today, discussing the proposed Scams Prevention Framework.

The Scams Prevention Framework Bill 2024 takes steps towards fortifying Australia's defences against a very real and escalating threat. However, it doesn't do enough. We must be honest about this bill's shortcomings, because, as it stands, it risks burdening the very people we're trying to protect. One of my key concerns is the onus reversal that this bill proposes. Under this bill, victims not only are left to pick up the pieces but are also expected to prove that the financial institutions or platforms they trusted failed them. They must somehow gather evidence to make a case against companies that have teams of lawyers and access to all the data they themselves lack.

According to an ACCC report from April last year, it's older people who suffer the greatest harm at the hands of scammers. Losses for people over the age of 65 increased by 13.3 per cent in 2023 to $120 million in 2024. Imagine an elderly woman who has recently experienced a devastating financial blow because of a scam. Her hard-earned savings have vanished due to sophisticated fraud, leaving her overwhelmed with the daunting task of proving what went wrong. She now faces not only emotional turmoil but also a taxing and arduous process of proving that her bank didn't take the proper steps to protect her. This process is unfair. As it stands, this bill shifts that burden onto individual victims, asking too much of those who are already struggling. The reversal of the burden of proof creates a stacked deck where corporations are shielded behind technical jargon and internal policies that consumers aren't even allowed to see. It creates a barrier that favours those with resources and penalises ordinary Australians, who are often isolated and unable to navigate such a complex process alone.

Another pressing issue is the lack of a clear, consumer focused timeline for resolving disputes. Currently, people who have been scammed can face months or even years trying to get answers. They're left in limbo, often with financial stress that compounds their trauma. We should be putting in place a clear, timely process that allows scam victims to find redress quickly, not landing them in a bureaucratic maze. We should look closely at the UK, where they've established a clear presumption of reimbursement for scam victims. The UK model starts with a simple idea: consumers who've been scammed will be reimbursed if the institution fails to prove it took every reasonable action to protect them. This approach not only aligns with models proposed by experts but represents a critical shift in the pervasive victim-blaming dynamic that often underpins the response to scams. In the case of the UK, placing the onus back onto the institutions that control the systems that facilitate scams and away from consumers who simply don't have the resources or information to prove negligence has proven to be an effective model.

According to the UK Payment Systems Regulator's June 2024 report, victims of scams in the UK were reimbursed for 67 per cent of their losses in 2023, with that figure expected to rise to 95 per cent under a mandatory model. In stark contrast, Australian banks reimbursed only two to seven per cent of scam losses in 2023. By holding institutions responsible, unless they can demonstrate proactive and reasonable scam prevention measures, the model has led to a shift in industry practices, with banks investing more in antifraud technologies and strategies. The focus on institutional responsibility not only improves consumer protections but also reduces the overall impact of scams, as institutions have stronger incentives to prevent fraud before it occurs. This model drives accountability and delivers real, positive outcomes for victims by ensuring that those with the power to prevent scams are fully responsible for doing so.

The data shows that a model like this is effective not only in delivering compensation to victims but in driving long-term improvements in scam prevention. Presumption of reimbursement provisions exist in laws addressing power imbalances and information asymmetry, which is especially true in the case of scams. Experience tells us that, if we don't hold companies accountable, they will likely do the bare minimum, and it's Australians who will pay the price. As it stands, this bill doesn't do enough to drive real, proactive protections across banking, social media and telecommunications companies, and this is what needs to change. We need to shift the responsibility from individuals to institutions. We must hold banks and platforms accountable for protecting Australians, not ask people to justify why they deserve redress.

Second, we must compel companies to formally acknowledge their obligations under the Scams Prevention Framework. The proposed amendments put forward by my crossbench colleagues mandate the public disclosure of prevention efforts, require companies to provide a statement of compliance and ensure special protections for vulnerable consumers. These will strengthen the bill's effectiveness, addressing some of the flaws I have outlined today. Mandating public disclosures of scam prevention efforts will help shine a light on industry practices, ensuring companies do more than just meet the bare minimum. The member for Mackellar has introduced a 'vulnerable consumer' definition, which will enhance protections for consumers who are particularly susceptible to scams, including elderly people, non-English speakers and people with disabilities. The member for Wentworth's amendment requires regulated entities to publicly disclose information about the scams they detect and respond to. Under this provision, entities involved in scam prevention must publish quarterly scam reports, with civil penalties imposed on those that fail to comply.

Enshrining special protections for vulnerable Australians and measures to increase public accountability and transparency must be included in the primary legislation. These critical additions will ensure scam victims are not left in the dark when trying to seek redress. Crucially, the amendment being moved by the member for Warringah introduces a statement-of-compliance requirement, a particularly crucial step in protecting small businesses and Australians from scams by increasing transparency and accountability. Financial institutions and digital platforms handling scam complaints will be required to formally demonstrate compliance with their obligations through a written statement, ensuring businesses are not left in the dark when seeking redress. Failure to provide this statement will be a civil penalty provision, making institutions more accountable while also strengthening small businesses' legal ability to unfair denials of reimbursement. Additionally, these statements will be admissible in external dispute resolution, giving Australians and small-business owners a stronger foundation to recover losses. This is a crucial addition and a necessary first step in safeguarding the businesses that sustain our economy.

Finally, I am concerned that this bill lacks an explicit focus on mental health and well being, leaving a critical gap in its approach to addressing the full impact of scams on individuals. Scams inflict more than just financial wounds. They cause extreme stress, anxiety and other mental health issues, especially for those who may already be vulnerable and marginalised. The absence of a mental health lens in this legislation overlooks the compounded effects of scams on victims, who often experience ongoing distress and psychological harm. While this bill offers avenues for consumer redress through internal and external dispute resolution mechanisms, it stops short in the critical area where it must bare its teeth. My criticism of this bill is informed by extensive consultation with experts, by the experiences of victims in my electorate who come to my office in Goldstein desperate for help and by the clear lessons we can draw from successful models overseas.

That said, while this bill is far from perfect, Australians simply cannot afford to wait any longer for some protections against scams that are escalating in scale, sophistication and devastation. I am inclined, for that reason, to support this iteration of the bill, but it is clear that this legislation alone is not enough. We must ensure this framework is backed by enforceable, sector specific codes that create real accountability. While this bill lays the legal foundation for scam prevention, the second phase—implementing mandatory industry codes—is essential to establishing clear, enforceable standards across banking, telecommunications and digital platforms. Without these codes, we risk a fragmented approach that leaves consumers vulnerable. These codes must be binding to ensure consistency in internal dispute resolution processes across banks, telecommunications providers and digital platforms. I will continue to advocate for a robust scams prevention framework, one that holds industries to account, provides clarity for consumers and prioritises fair and timely outcomes for scam victims. This is unfinished business. The financial and emotional toll of scams is too great for us to take half-measures. We must get this right. We have the chance to do better for Australians—to create a system that doesn't leave people fighting impossible battles on their own.

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