Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Before I commence, Deputy Speaker Vamvakinou, I want to wish you particularly well in your career post-parliament.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Thank you.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Scams Prevention Framework Bill 2024, and I have some good news and some bad news. Member for New England, do you want the good news first or the bad news first?

Barnaby Joyce (New England, National Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Go with the good news.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I'll start with the bad news. The bad news is that in 2023 a staggering $2.7 billion was lost to scams in Australia. The good news is that this was 13 per cent lower than the preceding year. But, obviously, it's still far too high. That $2.7 billion figure is just one number, but it entails thousands and thousands of Australian heartache stories. But, as I said, it could have been $350 million or more—much worse.

Scams have become increasingly more sophisticated, and many originate from complex transnational criminal syndicates. It's not always easy to spot a scam, yet many victims still feel shame and embarrassment when they find their accounts are a little bit lighter. Each scam that is perpetrated represents an organisation or a person who has been deceived and has lost money. Scams are expensive, distressing and can be financially devastating for victims. That's not to mention the fact that they can stop people from communicating with the rest of the world—they're too scared to answer the phone, too scared to answer emails.

Australians have fallen prey—to the tune of hundreds of millions of dollars—to investment scams, fraudulent remote access and romance scams. That is why the Albanese Labor government is focused on developing a whole-of-economy prevention framework. One of our key election commitments was to protect Australians from scammers. Since coming to office we have directed over $180 million to fighting scammers. Part of this funding was directed towards the establishment of the National Anti-Scam Centre, the NASC. It sits within the Australian Competition and Consumer Commission and serves as a link between industry and government. One of its key aims is to enhance collaboration amongst government, finance, telecommunications, digital platforms sectors and law enforcement to combat scams. The intention of this collaboration is to disrupt scammers, whether that is to prevent contact, to interrupt contact or to stop fraudulent payments being made once a scammer has established a connection with their victim.

The NASC also runs the Scamwatch service. This is an excellent resource for us all. It shares up-to-date information on scams and offers valuable tips on how to spot a scam. It details the steps to take if you think you've been scanned and enables people to report a scam and therefore keep their friends and neighbours safe.

Labor has also legislated the establishment and maintenance of a register of legitimate sender IDs by the Australian Communications and Media Authority. This legislation puts an industry standard in place for telecommunications providers who manage SMS traffic. Telco providers are required to check texts with sender IDs to ensure that they're on the register. Those which are not may be blocked or the text message may be tagged with a warning or labelled as fraudulent.

The Albanese Labor government is now building on these measures to introduce the Scams Prevention Framework. Broadly speaking, it will require the private sector to adhere to robust industry codes and principles based obligations. The establishment of the framework will tackle head-on the current situation with scam protection, where there is inconsistency across sectors with both protections and responses.

The bill in front of the chamber employs a broad definition of what a scam is. This reflects the dynamic nature of scam activity, which is increasingly technically sophisticated and is continuously evolving. The core business of scammers is to cause harm or loss through deception. The bill reflects that this occurs in a variety of ways and in ever-changing ways. Similarly, the term 'consumer' is broadly defined. In the bill, it includes individuals or small businesses that access services provided by regulated businesses in Australia. Consumers may also use these services while out of the country but still be covered by the bill if the provider is a regulated entity in Australia.

The first sectors that will be required to comply with the Scams Protection Framework are banks, telecommunications providers and digital platforms that provide social media, paid search advertising and direct messaging services. These are the most common avenues that scammers use to target Australians. Scamwatch notes that in 2023 the most reported payment method used by scammers was bank transfers, with nearly $213 million in losses. Phone calls were associated with $116 million worth of losses and social media with nearly $94 million. Most scams originate via social media, phone, email, the internet, mobile apps and text messages, with the bank being the final link in the chain where the funds are transferred. The Scams Prevention Framework will have a consistent and enforceable approach, ensuring that all the components of specific sectors have strong protection. After all, scammers don't use just one method to defraud people.

The Scams Prevention Framework has six overarching principles. The first of these is enhanced governance for regulated entities, including the documentation and implementation of policies and procedures, targets, and the outcomes of scam prevention efforts. The next set of principles concerns regulated entities putting in place reasonable steps to prevent, detect and report scams. This means implementing additional layers of verification and validation procedures online and enhancing processes with the timely identification of scams. It also means alerting consumers as quickly as possible. These measures will help to disrupt the activity of scammers. Regulated entities will also have to report information on scams to the ACCC. Entities must report as soon as it is reasonable to think that the scam activity is underway, whether that's a communication or a transaction. The ACCC may then share this intelligence amongst other entities to disrupt the scammer's activities—that's the collaborative approach that I spoke about earlier. As you can see, to fight scammers effectively you need wide-ranging and concerted tactics.

The final two principles focus on disruption and response. The bill includes the provision of a 28-day safe harbour protection for regulated entities to take disruptive action, in good faith, while protecting third parties. There's also a requirement to continue consumer education and awareness. To enhance responsiveness to consumers, regulated entities must implement efficient ways for consumers to report scams and lodge complaints. A scam victim will have access to dispute resolution processes free of charge if a regulated entity has not met its obligations within the framework. To this end, regulated entities must demonstrate that they have an internal dispute resolution process and are also a member of a selected external dispute resolution system.

The external body responsible for dispute resolution for the initial sectors in the framework will be the Australian Financial Complaints Authority. The AFCA will address consumer complaints, including when the scam involves more than one entity. Consumers will also be able to escalate their complaints to the court system if a regulated entity has not operated within the framework appropriately. The dispute system will ensure ease of access for consumers. Basically, there is no wrong-door approach, as consumers can raise an issue with any regulated entity. The AFCA will also respond to consumer scam complaints, even if the issue involves multiple regulatory bodies. Consumers are given extra assurance, with a planned consultation on the dispute resolution model in 2025. We want to ensure it's working as we intend for consumers.

The Scam Protection Framework's mandatory codes will be sector-specific and provide a minimum set of standards for each sector. They also recognise the need to evolve to ensure the ongoing, effective disruption of scams. The bill proposes a multi-regulator approach to build on existing sector expertise. The ACCC will be the regulator for the principle based obligations as well as the digital platforms sector. The Australian Securities and Investments Commission will oversee the banking code, and ACMA will enforce the telecommunications code. This approach will ensure that no one body is overwhelmed, especially as additional sectors are brought into the framework.

Future editions could include superannuation, cryptocurrency, online marketplaces and other payment providers. The bill directs that the responsible Treasury minister can designate additional sectors to be subject to the Scams Prevention Framework. After that, the minister can direct the establishment of an enforceable code that works for that specific sector—tailored for how people interact with that particular sector.

What powers will the regulatory bodies have? They will be able to penalise an organisation up to $50 million for the worst breaches of the framework. That will obviously be an incentive for compliance. Regulators also have a range of lesser penalties to apply such as infringement notices, injunctions, public warnings and remedial directions, stepping up the process as modern businesses do. It's important to note a key difference between this bill and other international approaches such as in the UK. Labor is not implementing a mandatory-presumption-of-reimbursement approach. We want to address scam activity across all sectors by incentivising all sectors to take responsibility. After all, there are many opportunities to stop scam activity before the consumer loses money, not just at the point of the bank transfer.

This legislation is world leading. The Assistant Treasurer highlighted Australia's leadership of this issue when he attended the first Global Fraud Summit, in March 2024, and this bill reflects Australia's commitment to working with international partners on fighting scams. At the heart of this legislation is our determination to better protect consumers. We are determined to make Australia a harder target for scammers. Australians deserve to be able to participate in the digital economy safely and with confidence. The bill gives consumers additional peace of mind, knowing they have both strengthened protections and avenues for dispute resolution if required if it all goes bad.

On a final note, I would like to thank the assistant minister, Stephen Jones. I know that he is leaving the parliament and I particularly want to thank him for bringing scams to the front of people's minds throughout Australia along with how we as a nation can fight back. Rather than just retreat from scammers, now we are fighting back. I thank him for that. As I said at the start, we still lose too much. It is 13 per cent less this year than last year, which is $350 million, and it could have been a lot worse, but so much of that is down to Minister Jones. He has been a good friend and a good man. He is also a Dragons supporter, so that means the minister and I are the two Dragons supporters leaving the parliament, which I know is a great fact to him! Hopefully, some of the candidates who get elected will also be Dragons supporters. I wish him well and I commend the bill to the House.

Anne Webster (Mallee, National Party, Shadow Assistant Minister for Regional Health) Share this | Link to this | Hansard source

Scammers are the scum of the earth. Scammers target vulnerable Australians, but make no mistake: they come after every Australian. Scammed Australians are not stupid; they are victims. I want to start with those statements of principles because I fear that, in the debate about scams, vulnerable Australians—victims—are ignored and, in fact, sometimes insulted by their banks. I fear that the debate on the Scams Prevention Framework Bill 2024 and in the scam space is all about the banks and people who hold shares in banks and not about their customers, the victims, the vulnerable Australians.

They are vulnerable Australians like 82-year-old widow Emily, from Mildura in my electorate, who lost her husband in June last year. Shockingly, just a few weeks later, a message popped up on her computer screen that she was being scammed. The message told Emily to call a 1800 number to speak with Microsoft. A voice at the end of the line said they were trying to track down the scammers and wanted her help with a sting operation asking for her account details so they could put money in her account to transfer to the scammers to assist with the police operation. Instead, these scumbags were the true scammers and helped themselves to $157,000 from her bank account. And how much did her bank agree to reimburse her? You won't believe this, Deputy Speaker. It was just $22.36.

I spoke to Emily during the final sitting week of last year, and she told me how she felt so ashamed at being scammed, so embarrassed, that she didn't want to tell her adult children. This is so wrong. Emily should never have felt ashamed. No-one who has been scammed should feel ashamed. And if you have been scammed, I want to make this clear: you have been manipulated, disempowered and gaslit by people who intended nothing but evil towards you.

I met with Emily's bank representatives here in Canberra soon after speaking with her about this situation because I felt it was fundamentally wrong, and I told them as much. After some discussion, I am pleased to say that a settlement was reached. This is what Emily had to say about the outcome:

I was getting nowhere going through the bank fraud people. So I thought, it's a lot of money, I want to try as hard as I can to be recompensed for something. So I went to my member of Parliament, who I vote for and always will!—

I will say that's always a lovely message—

I've been astounded at the result. I didn't know members of parliament had such contacts.

In my view, it is my job and my privilege as a parliamentarian to help Emily and people like her, but why does it have to come to this? Why do members of parliament end up being ombudsmen and clearing houses for sensible decision-making that simply should have been appropriately handled in the first place?

Emily is an intelligent woman. I dare anyone in this place to call Emily stupid. I don't believe anyone in this place would call Emily stupid. Emily's family told me that she is computer savvy, creates invoices on the computer and does a lot of internet banking, and, as they say:

She's not easily fooled and has been caught at a moment of vulnerability.

I reiterate: Emily is not stupid, but that is the implied message that sits behind the banks' collective treatment of victims like Emily and, I am sorry to say, behind this legislation in its current form. Investment scams are a big portion of Australia's scam losses. Emily's story—and I'm about to share more—falls outside the approximately $1.3 billion in Australian investment scam losses. Surely, if there is concern about what a mandatory reimbursement of customers might mean for banks and their shareholders, the primary group for protection should be everyday Australians who are not trying to invest money but are tricked into handing over personal details.

Let me give some of those personal stories. The wife of one of my staff bought tickets to go to a museum on a state government website. Their credit card details were taken, and a scammer helped themselves to buy some Armani goods in Asia. That family only got their money back by threatening legal action. They have since changed banks, something banks would do well to remember. As I prepared to speak on this bill late last year, while discussing Emily's case with her bank, another of my staff was here in Canberra and put her husband on speakerphone. His home computer was frozen, and he was on another line to a 1800 number—which the on-screen message had directed him to—claiming to be Microsoft. Here we go again. It wasn't Microsoft; it was scammers. They would most likely have asked for personal information to access his finances, just like Emily. However, there were several of us in the office at the time who told him to hang up immediately, shut the computer down and invest in some reputable computer security protection. It's a really good idea; if you don't have it, I would strongly recommend that you get some.

I have another story: a publican in my electorate thought he was ordering beer for his pub from his regular website. He wasn't. He said goodbye to tens of thousands of dollars. I won't name him, but good luck telling him he's stupid. The Maryborough District Advertiser newspaper in the south-east of my electorate told the sad story of Janet, who lost $30,000 she had saved for her children. Janet got a call from someone claiming to be Telstra and saying her phone had been hacked. She was unwell at the time with a punctured lung and pneumonia and was taken to hospital the next day, so she was convinced the so-called technicians were there to help her. In the circumstances, would you call Janet stupid? I don't think so. Janet was vulnerable, and the scammers are scumbags. But it gets worse. Janet later found her money in her bank was gone. Janet was initially relieved to hear from her bank that she was going to get some money back. What did she receive? $3.66. That would ease the burden, wouldn't it? $3.66—there must be some one per cent rule the banks are using to recompense victims. My word to them is thanks very much on behalf of everyone who is being scammed!

Seventy-six-year-old Vietnam war veteran Danny McIver, another Mallee constituent, lost $70,000. We're not talking peanuts here; we're talking about people's life savings. He lost it from the life insurance payout he got from the death of his son, Robert, who died two weeks after Danny lost his daughter, Sharon, to motor neurone disease. The scam? Another Microsoft impersonation scam, last September. Danny told news.com.au that he couldn't believe it took the bank nearly two hours to discover that funds had been taken out of his bank account four times. None of these were investment scams—just people caught out by scammers that target the vulnerable.

In the United Kingdom, prior to the new 7 October mandatory obligation, the majority of banks were voluntarily reimbursing their customers 72 per cent of the time. In contrast, in Australia, the voluntary bank reimbursement figure is less than five per cent.

The Global Anti-Scam Alliance say that in the most recent reporting year scammers have taken a whopping $1 trillion. As they note, that rivals the GDP of some nations. In countries like Pakistan, their scam losses are equivalent to 4.2 per cent of their GDP. It's 3.6 per cent in Kenya and 3.4 per cent in South Africa. The Global Anti-Scam Alliance said in their latest report Australians lose US$1,452 per capita per year to scams, well below US$3,500 in the United States and US$1,800 in the UK. The Global Anti-Scam Alliance report found that globally, when survey respondents were asked who they expect to ensure scam victims are reimbursed, they answered the online platform used by the scammer, the website they used or the bank.

This legislation we have before us today doesn't seem to be drafted to protect Emily, Janet, Danny, my staff, their families or vulnerable Australians but rather to protect banks. The new United Kingdom legislation—introduced by the now former Conservative government, I might add—relates to so-called authorised push payment, or APP, scams. Britain mandated that banks must compensate scam victims 99.9 per cent of the time. Further, the UK system defines some customers as vulnerable and does not require them to exercise a standard of caution. That is, other customers are required to show they have not demonstrated gross negligence. Vulnerable customers are also not required to carry the 100 pounds excess on their reimbursement. Britain's maximum reimbursement is 85,000 pounds. The banks at either end of the transaction must pay half that cost each.

Let me ask you this. Who is best placed to protect bank customers from scammers: vulnerable customers like Emily, the recently bereaved widow, or the banks themselves? Who is best placed to go chasing social media companies or internet platforms for responsibility: widows like Emily or Janet, with her punctured lung and pneumonia, or the banks? Clearly the United Kingdom have decided that, no matter what role social media or internet platforms have played, the fairest and best outcome for victims is for them to be reimbursed. The banks can go hunting the platforms after that.

I am furious—and I have been furious since last year—that vulnerable Mallee constituents are being scammed. And now let me disclose my own interest. I too have been scammed. I bought tickets to a big hotel in Melbourne, only to discover afterwards the ticket website that they had moved me onto was fake, and money was taken from me—$9,000, in fact. My pathway to getting reimbursed by the bank was not straightforward. I'm not embarrassed by being scammed. I'm angry, but I'm not embarrassed. I've had private conversations with members here, and they admit they have been scammed as well. It is becoming far too common. Over $2 billion is lost to scams in Australia every year, with around $2.74 billion dollars lost in the 2023 year. That contrasts with over one billion pounds per annum being scammed in the United Kingdom across their population in recent reporting years. Yet they've gone all in, compelling banks to reimburse customers.

Australians were the victims of around 601,000 reported scams in the last reporting year, up 18.5 per cent, and both the number of reported scams and the amounts lost are just that—reported. There could be a whole lot more from embarrassed people who don't want to admit that they've been scammed. Are Australians stupid? Are my constituents stupid? No. Yet the implied message in this bill is we need to protect the banks, not vulnerable Australians. Labor's solution in this bill is not immediate reimbursement; it is handing vulnerable Australians a snakes-and-ladders board where they roll the dice and move up and down the ladders and slip down the snakes. Internal dispute mechanisms, external dispute mechanisms, legal action against the bank—really? Is this the best the government can do?

I hasten to add in this banking regulation space that more than half of Australian ATMs have closed in the last six years, and many of my constituents who rely on cash can't get to an ATM in their town or anywhere near where they live. It's well and good for the government to be talking about mandating the use of cash in essential service contexts, albeit with potential small-business exemptions, but, if regional Australians can't withdraw cash, what then? I urge anyone watching or reading to go to www.scamwatch.gov.au for the latest information on scams and on how protect yourself and to discuss sensible protective behaviours.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

Scams take many forms. They include investment scams, remote access scams and romance scams. I remember making a speech, as what we now call the Assistant Minister to the Attorney-General, in the Brisbane convention centre in relation to what we were doing in respect of fraud and scams involving credit cards, and I said to the departmental officials: 'Is this correct? This figure that I've got to talk about is in the billions, not millions.'

But, when I look back on the nine years of the Morrison government, the Abbott government before that and the Turnbull government wedged in between, they did nothing. We get lectures from those opposite about it, but they did nothing in relation to the issue over nine long years. So we won't cop this criticism that they're making of us. Before we brought forward this legislation, we invested $180 million. And we've actually got scam losses in Australia down from $3.1 billion in 2022 to $2.7 billion in 2023. That's a decline of 13.1 per cent because of the action taken by this Labor government.

So we're taking steps, and we've got this legislation before the chamber, which will make a big difference. But we've still got a situation in this country where about 601,000 Australians were scammed last year, including some in this place. We all have family and friends who have been scammed, and scams take many forms and are insidious and clever. I remember being on a number of parliamentary committees involving gambling when people anonymously or privately were giving us evidence in relation to the way they were scammed. These were very prominent people in the country.

I'm pleased to say that this legislation, I believe, will make a difference. It's the Scams Prevention Framework Bill 2024. The Albanese government is protecting people from the scourge of scams, and we're taking this seriously. We want to make Australia the toughest place in the world for scammers to operate, and we are making a difference. We know that scam activity is on the rise. That doesn't mean to say that people are falling for it, but the activity is there. That wonderful thing which we call the internet has allowed people from all parts of the world to tap into it and present themselves as some person who truly loves you and wants you to give them money because they're in desperate need, or they've got some sort of scam all over the place. Maybe they've got a get-rich-quick scheme, and it looks fantastic: 'If you only invest in it, you'll do well.' So it takes many forms.

The current scam protections are a bit all over the place. They're not consistent across the economy, and there are different protections and responses across different industries and providers. So we're taking up the fight. This is an all-encompassing framework. It's coherent. It will make a difference. It's about prevention, detection, disruption and response. The Scams Prevention Framework, as we call it, will become an important part, the central part, of the government's broader consumer protection agenda. So this will make a difference. We're providing some strong defences.

This landmark legislation has been criticised by those opposite, but I notice that in nine years they didn't do anything like this. This landmark legislation delivers on an election commitment. We knew in opposition that we had to do things. We knew that the previous government had sat on their hands. It didn't matter whether the Prime Minister was an Abbott, Turnbull or Morrison. This bill establishes a whole-of-economy approach. It places obligations on key businesses through the Competition and Consumer Act 2010. The framework is the cornerstone delivering on our commitment. The legislation puts real obligations on banks, social media companies and telcos to prevent scams or face hefty fines and compensation for victims.

The previous speaker talked about the difficulties. That's why we want to take action. Under the framework, designated businesses—initially banks, social media platforms and telecommunications companies, where a lot of the scam activity currently occurs—will face fines of up to $50 million if they don't take reasonable steps to prevent, detect, disrupt, respond to and report scams and attempted scams in their business. Victims will have clear pathways to compensation if businesses fail in their obligations.

The Australian Competition and Consumer Commission, the ACCC, gets new powers under this legislation to direct businesses to take specific steps to keep their customers safe from scammers, and the Australian Financial Complaints Authority—who, I might add, could do a lot better on insurance issues in relation to floods—will be empowered to resolve consumer claims over scams in these sectors.

Consumers were left to fend for themselves before we put big business on the hook for redress when they failed to stop scammers. Once the legislation passes, the framework will enable the minister to establish some sector-specific codes, and the codes will impose mandatory obligations on banks and the other organisations that I talked about. It will mandate that these designated sectors have internal dispute resolution mechanisms that are clear, accessible and transparent for consumers. We're familiar with this type of process, and I don't know why we're being criticised for it, because it operates across a whole range of sectors in the economy.

Currently, social media platforms have no mechanism for consumers to raise disputes. In addition, the framework will allow the minister to make rules setting out guidance on how to apportion liability at an internal dispute resolution between one or more businesses who are at fault to assist victims seeking redress. It will enable a single external dispute resolution scheme for scam complaints made under the framework where a dispute cannot be resolved through internal dispute resolution. AFCA operates like that now on insurance issues, for a start. It will build a mandatory coordinated intelligence sharing ecosystem that requires timely reporting and information sharing across industry and government. I might add that the reforms have been subject to extensive consultation—it's a pity those opposite didn't listen to the people who gave us feedback—and stakeholders broadly support the system that we're bringing in. It's also worth noting that other sectors, such as superannuation, cryptocurrency, online marketplaces and other payment providers, may be designated under the framework in future.

I know there has been some criticism that the legislation is too soft on the banks. The previous speaker said that it was just on the banks and nothing else. There have been calls for the framework to go further, particularly in respect of mandatory reimbursement by banks. The government have not taken a mandatory presumption of reimbursement approach, like the United Kingdom's, because we want to incentivise actions to address scam activity across the entire scam activity chain, including banks, tech platforms and telcos, and not leave some sectors with lower expectations and responsible for liability. We don't want just one sector to be responsible; we want the whole chain to be responsible.

The rationale is that placing liability on banks alone fails to recognise and hold to account entities that have had many opportunities to stop a scam before harm is caused to the consumer. It's the same thing in all forms of litigation: you look at the different groups and organisations who are at fault. Whether it's negligence or breach of contract, you look at everyone. You don't pick on one particular sector or one particular business. That may be why we've seen some of the banks come out and raise concerns about social media companies' management of scams on their platforms. The framework will ensure that all points of the scam chain are held to account, as it is common for scammers to use multiple platforms and services to steal from consumers.

The Senate Economics Legislation Committee's report on the bill recommended it be passed. I know that as part of that inquiry a range of views on the bill and our Scams Prevention Framework were expressed by both parliamentarians and stakeholders. Some of the claims from the Greens and crossbench senators in the context of the inquiry, suggesting the government was protecting banks, were frankly ridiculous. As I said before, our world-first approach will ensure all parts of the scams chain have to account for the actions they take to protect consumers. The banks themselves have said that when they're at fault they will reimburse victims, and that will continue.

We're working to ensure consumers get swift access to justice and that we have the right incentives in place to protect their interests. We're deliberately taking a preventative approach so scams don't happen in the first place, because it's always better to prevent a crime happening than to rely on compensation. The reality is that this is the toughest legislation the world has seen, and it's clear that there's strong support for it to pass. We'll work through some of the details, but the overwhelming message from the inquiry was that strong prevention measures are needed.

This bill is just one part of an ambitious anti-scam agenda the government is rolling out to protect Australians. We've already set up the National Anti-Scam Centre and Scamwatch service—that was in July last year—as part of our $86.5 million investment to fight scams and online fraud in the 2023-24 budget. The National Anti-Scam Centre, located within the ACCC, is a world-leading partnership between government law enforcement agencies and the private sector. It means consumers can look to a trusted centralised point within government for information and education to protect themselves from scams.

On top of this, just last month the government launched the Fighting Scams Campaign, which includes TV and social media ads running until 22 March. This campaign is about equipping Australians with simple, actionable strategies to guard against scams. The key messages are: stop before sharing personal information; check that you know who you're dealing with; protect against scams by taking actions like reporting them to scamwatch.gov.au.

I was pleased to see the Australian Banking Association back in the scams awareness campaign which is part of our response. Everyone needs to do their bit. The government's action is about keeping people's money safe through our prevention strategy, and I think it's showing early success. Losses have almost halved since we stood up the National Anti-Scam Centre. Scamwatch data shows that reported scam losses dropped by 40 per cent in the 2023-24 financial year compared to the previous year. This bill will implement the framework.

Just like the National Anti-Scam Centre and the Fighting Scams Campaign, our important role—as the previous speaker said, and I agree with her—is to raise awareness in the local community. In July last year I was delighted to have the Minister for Financial Services at a community scams forum in Ipswich. It was an opportunity for locals to learn ways to protect themselves from scams, to know what to do if they're targeted by a scam and to hear more about the steps the government was taking to crack down on this crime. A number of the government and community organisations attended: Australia Post; Services Australia; Queensland Police Service; and IDCARE, the national identity and cyber support service. They provided information and feedback on scams impacting the local community in Ipswich as well. Police officers, such as respected police sergeant Nadine Webster from the Ipswich District Crime Prevention Unit, spoke at the forum and reported that local police had succeeded in shutting down a scam operation just around the time that the members of the public came forward with information, and she gave a very detailed account of it.

I was very pleased to see the work of the local Queensland police, but there were some very sad stories too. We heard that day—and in our offices we hear all the time—about scammers ripping money out of the pockets of hardworking locals. The IDCARE data shows that about $1 million had been lost to scams in Ipswich in the previous six months. For example, we heard from a constituent, Peter, who had been conned out of $130,000 when he thought he was investing in a safe term deposit through a broker. Many people talked about experiencing persistent calls, spams, texts and misleading advertisements on social media attempting to scam them out of their money. I thank local people in Ipswich for coming forward at the forum and being so open about what they had experienced. What it shows is that it's more important than ever for people in my community to be alert and aware of how to protect themselves. It also highlights why this legislation we're debating today is just so urgent.

In closing, I will say that the Albanese government has made scams a priority. We do get the financial and emotional turmoil. It was on full display at the scams forum last year in Ipswich. We want to rid Australia of this. We'll work together with anyone and everyone in relation to this. We want to ensure that people keep more of what they earn, and we're going to make sure that they keep their money safe. We're determined to crack down on criminals who rip off hardworking Australians. By sending a clear message that this harmful practice won't be tolerated here in any way at all, we're making Australia the hardest place for scammers to ply their trade. We want to make sure that victims know that we have their backs. We know more needs to be done, and that's why this legislation is before the chamber.

People in my community want tough action to protect their money and prevent crime. They want information. They want these laws delivered in the fight against scammers. I urge the parliament to do the right thing by the people in my community, whether they live in Ipswich or the Somerset region or around Karana Downs. I want this whole parliament to support this legislation to ensure consumers get the protection they need as soon as possible. I commend the bill to the House.

Sophie Scamps (Mackellar, Independent) Share this | Link to this | Hansard source

I rise today in support of the government's efforts to address the scourge of scams in this country, but I do so with significant concerns about the way they've approached the problem in this, the Scams Prevention Framework Bill 2024. The prevalence and pernicious impact of scams in this country mean that real, tangible effort to address them is urgent. Many other countries are forging ahead to protect their citizens. Australia is lagging behind and needs to do the same. The UK has set a strong precedent.

Let's have a look at the scams landscape in Australia so that we get a sense of the scale of the problem. Last year we lost $2.74 billion in this country to scams. That's more than $5,200 per minute, all day, every day, and that's only the scams we know about. People are invariably ashamed to discover they have been scammed, duped and fleeced, so many scam victims never report what has happened to them. Let's put those Australian losses in perspective. The $2.74 billion a year that we lose to scams is 18 per cent more than what the people of the UK lose to scams, and that number is not per capita; the UK has 2½ times Australia's population.

To the extent that there is a debate about scams regulation creating a honey pot—more on that a bit later—the fact is that we are already a honey pot for scams. It's hard to imagine how proper regulation could make it worse, and, despite what the big banks would have you believe, they are not doing nearly enough to prevent scams taking hold.

It's also important to point out that, when we talk about scams, we're not talking about fraud. Fraud is when a third party steals your identity or your credit card and steals from you without your knowledge. That loss is not included in the figures I've just mentioned, and, more importantly, as many of us know, is typically reimbursed by financial institutions. A scam is when we ourselves authorise a transaction—give our money away—but under false pretences, to scammers who have promised a reward, an investment return or something similar. It's more complicated when you yourself have handed over your own money, and it's more embarrassing and more traumatising for the victim. Like the scourge of domestic violence in this country, no-one is too well off, too educated or too sophisticated to be safe from falling victim to a scam. My community is, appropriately, very concerned about it.

Since I was elected, I've been contacted by many constituents who have been the victim of absolutely terrible scams or have had loved ones who have been. Everybody knows someone who has been a victim. And it's not just the victim of the scam that is impacted; entire families are affected, particularly when life-changing amounts of money are lost. To respond to that concern, I've partnered with Scamwatch to host community information sessions on scam prevention. Scamwatch is the Australian government initiative designed to help consumers stay one step ahead of the scammers. Recently I held a webinar with Stephanie Tonkin, the CEO of the Consumer Action Law Centre, to help equip my constituents with the information they need to best protect themselves. These sessions were indeed very popular, and the stories of the scams that people had fallen prey to were alarming, to say the least.

One constituent wrote to me about her 93-year-old mother being scammed. It was only after a serious car accident, fearing that she might die, that her mother admitted to having been scammed. The scam involved direct phone calls to her mother from people purporting to be from the Federal Police and from her bank, and the scam played out over several months. The scammers managed to convince her that the only way she could keep her savings secure was to move her money around to other accounts by buying gift cards, sending cheques to various places and making large transfers to unknown people. They used every trick in the book. The scammers took advantage of her age and her vulnerability; her trust in authority, typical of that generation; and her lack of computer skills. In the end, this scam involved six financial institutions and resulted in my constituent's mother losing $800,000. Six financial institutions were involved.

Due to my constituent's diligence in pursuing this matter over 18 months, around $150,000 of that money that was scammed away was recovered. But recovering even this portion of the money has been exhausting work for her. In her experience, the position of the majority of the financial institutions was to blame the victim, implying negligence or carelessness. It was not that she was preyed upon by fraudsters or that the bank ought to have done so much more to protect her, a vulnerable customer. The banking institutions are privy to a vast amount of information that we the public do not have access to. The constituent who wrote to me could not have summed up the position any better:

Banks in Australia are institutions of immense wealth and status. They exercise a very powerful role in our society …

It follows … that community expectation is for the highest standards of professionalism. To me, this would extend to exceeding minimum standards which are seemingly no longer fit for purpose, and crucially being proactive in responding to changing circumstances, in particular to the increased occurrence and destructive effects of scams, as well as being responsive to the needs and vulnerabilities of elderly customers, by ensuring the most effective, best-designed systems of protection are in place.

ACCC deputy chair Catriona Lowe said that their data indicates that scammers are targeting older Australians with retirement savings who might be looking for investment opportunities. So I am disappointed by the path the government has chosen to take to address this devastating issue, as the consumer—the victim—has been sidelined and neglected in this piece of legislation. The main argument that has been offered by the government to reject the reimbursement model is the honey pot, or moral hazard, argument. The argument goes that, if financial or other designated institutions automatically reimburse victims, then victims would take less care with their investments, knowing the reimbursement was guaranteed. The scams market would open right up, and scammers would flock here.

Australia is already the honey pot. As I mentioned earlier, Australians lose 18 per cent more to scammers than people in the UK do, and that is not taking into account the fact that their population is 2.5 times larger than ours. In 2022, in Australia, only 13 per cent of attempted scam payments were stopped by the banks before they occurred. Once completed, only two to five per cent of scams victims were reimbursed for their losses—a miniscule amount. In the UK, by contrast, the top four banks pay out 49 to 73 per cent of losses, and those statistics come from before the UK introduced an automatic reimbursement scheme. This is from when it was still voluntary.

Where is the evidence that Australia will become a honey pot? We have been shown none. The impact analysis in the explanatory memorandum of the bill states:

The core objectives of the government's policy response would be to both reduce scam harms and align the benefits and costs of scam prevention.

It goes on to say that Treasury has considered two options as part of that policy response. Option 1 is 'maintain the status quo'. In other words, do nothing. How is this considered a policy option robust enough to include in an explanatory memorandum for a bill of this kind? It is absolutely confounding. Option 2 is 'establish the Scams Prevention Framework'. This is just weird. In other words, the government considered no other alternatives to the option they settled on. They did not analyse scam prevention systems established in other, similar countries. Specifically, they did not adequately consider an automatic reimbursement model as has already been implemented in the UK. In fact, the only reference to the UK's reimbursement model in the explanatory memorandum is to reject, in two sentences, the strong joint recommendation of the Consumer Action Law Centre, CHOICE and the Australian Communications Consumer Action Network. Their call was to mirror the UK's reimbursement framework here in Australia.

In rejecting that proposal, the government states that it would, and I paraphrase, place a presumption of liability for scams losses onto one sector—that is, the banks—with minimal incentives for other sectors, such as telecommunications and digital platforms, to accept liability for not meeting their obligations. Let's break that down for a moment. In one breath, the government has rejected the recommendations of the peak consumer bodies in this country, because the banks would be negatively impacted, more so than the telcos or the tech companies. But where, in this analysis, is the consumer? Where is the victim? Where is the policy objective, let alone the policy response, of reimbursing what could be the loss of a victim's entire life savings? It leaves the victim in the position of having to potentially fight multiple financial institutions, telcos and social media companies for reimbursement. Talk about an uneven playing field. Furthermore, the peak bodies have quite rightly pointed out that the apportionment of liability between banks, telcos and social media companies could easily be done another way: among themselves, based on precedent, after the victim has been reimbursed. Why should the victim be further punished by having to wait months and often years for reimbursement?

The constituent whose story I described earlier urged me to call on the government to adopt the recommendations of the Consumer Action Law Centre, CHOICE and the Australian Communications Consumer Action Network to implement a reimbursement model. I'm here to do so. She shared her story with me, and I share it in this place to lend support to ensuring a world-leading, highly effective, consumer-protecting scams prevention framework is legislated.

Debate adjourned.