Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

I wonder how many have seen the newest ad campaign, with the bloke about to send a deposit for a lounge online when a little voice—which is his own—on his shoulder makes him stop. There's the lady being asked about her bank details whose voice says she should check and the bloke who's been told his account is overdrawn who listens to the voice telling him it's a dodgy email and shouldn't he protect himself. This is part of a new campaign, the Fighting Scams Campaign, which includes TV commercials and social media ads that are running now. They're designed to equip Australians with simple, actionable strategies to guard against scams—things like, 'Stop before you share your personal information,' 'Check that you know exactly who you're dealing with' and 'Protect yourself against scams by taking actions, like reporting them to Scamwatch.' I think it's a really useful ad.

Of course, we have tools like that and the Little Book of Scams, which I've been sharing far and wide in my community. But the Albanese government's work on scams goes way beyond simply raising awareness and asking people to take responsibility. Scammers are clever, cunning and criminal, and our comprehensive plan is about making Australia the toughest target in the world for scammers. This includes having everyone doing their bit, whether it's government, business or individuals.

When you mention the word 'scams' in the community, it doesn't take much for stories of fear and trepidation to come tumbling out. Whether it's a young person, a busy mum, a dad on the sporting sideline, a retiree or even my own husband and mum, everyone has a story of an attempted scam that they headed off at the pass. What is really distressing though is where the scam wasn't avoided, and the tales of lost money or ongoing financial loss—which started with a dodgy Facebook ad, an email that looked legitimate, text messages that sounded credible or a phone call that you'd swear was the real thing—are just gut wrenching. Anyone can be a target of a scammer. Whether you're 20 or 70, we know everyone should stay scam alert.

The Albanese government has made scams a priority because we get the financial and emotional turmoil that victims face, and we want to rid Australia of this scourge. Since being elected, the government's committed more than $180 million to combatting scams and online fraud. Our actions to date are helping keep people's money safe, with our prevention strategy showing some early signs of success. Losses have been almost cut in half since we stood up the National Anti-Scam Centre. Scamwatch data shows reported scam losses dropped by more than 40 per cent in the 2023-24 financial year compared to the previous year. This bill, the Scams Prevention Framework Bill 2024, is a vital next step, putting obligations on banks, social media companies and telcos to prevent scams or to face hefty fines and compensation for victims. It means that banks, social media platforms and telecommunication companies will have their responsibilities, and victims will have clear pathways to compensation if the businesses fail to meet those new standards.

I want to take a moment in discussing scams to pay tribute to the Assistant Treasurer for the years of work that he's done in this area. I think I had the first scam forum in the country at the Windsor Wharf in the Hawkesbury just before the 2022 election, where local Hawkesbury residents shared with us some of their bad experiences and near misses. I think what was interesting about that forum is that it also drew people from the Blue Mountains part of my electorate who had been so badly impacted they wanted to travel to be part of it. For me that was one of the really galvanising events, where you could see that every single person had either already been impacted or deeply feared being impacted by scams. They were thirsty for tools to help keep themselves safe. It also highlighted for me that an individual can only do so much and that the system had to change so there were protections and punishments for poor practices that led to someone being scammed.

As I said, there have been positive signs from the government's and industry's efforts to date to combat scams, but scam losses remain unacceptably high. In 2023 scammers stole $2.7 billion from Australians, and scammers continue to cause psychological and emotional harm for victims and their families. Current scam protections are piecemeal and inconsistent across the economy, and consumers face inconsistent protections and responses across different industries and providers. This Scams Prevention Framework being introduced is world-leading legislation. It's a central part of our broader consumer protection agenda. I'm going to call the Scams Prevention Framework the SPF—think of sunscreen, providing you with a protective layer. It's a bit like that. It's an economy-wide reform to protect consumers from scams by requiring the private sector to adhere to consistent principle based obligations and strong tailored industry codes which are enforceable. This approach will ensure that incentives and obligations are in place across key sectors that we know scammers take advantage of to cause harm to people in the community. This framework will ensure that all parts of the ecosystem used by scammers are held to account for implementing strong and effective protections that are specifically tailored to their sector and their role in the conduct of a scam. This is essential for the protection of consumers, as it's really common for scammers to use multiple platforms and services to deceive and steal from people.

Under this bill, regulated entities will be required to take reasonable steps to prevent, detect, report, disrupt and respond to scams and to have governance arrangements in place relating to how they will protect consumers from scams. There'll be mandatory sector-specific codes—a sector-specific code, even if adopted, does not relieve a business from their obligations to take reasonable steps in all circumstances, recognising that scams constantly evolve, so businesses must constantly evolve in their responses as well.

Banks, telecommunication providers and certain digital platforms offering social media, paid search advertising and direct messaging services will initially be designated under the SPF, as they represent key points of harm—where the harm begins for consumers. It's interesting to note that bank transfer was the most reported method used by scammers, with $212.9 million in reported losses in 2023. Phone calls and social media were the contact methods associated with the highest value of losses, $116 million and $93.5 million respectively in 2023. Other sectors may be designated under the SPF in future, such as superannuation, cryptocurrency, online marketplaces and other payment providers.

Now, I want to pause and reflect on the breadth of this legislation and highlight some evidence that I took from Meta at the social media inquiry that I was a member of. At that inquiry last year, I was extremely disappointed to hear from Meta that they did not feel they had responsibility for the scam ads that people pay them to have on their platform. These ads can be the first part of a scam; that can be where it starts. Meta argued in their evidence to us that they bore no responsibility, because the taking of someone's money happened off their platform, further down the line. So they were happy to take money from people who, it could be argued, were pretty obviously scammers or potential scammers, but they had nothing to do with any downstream impacts where other people lost money to these same advertisers.

That's one of the reasons why we need a comprehensive approach and we need multiple regulators involved, and this legislation provides for just that, a multiregulator model, involving the ACCC as the regulator for the principle based obligations and the ACCC, ASIC and ACMA as regulators for the sector-specific codes so that they capitalise on the existing industry knowledge and expertise each of those regulators has. It also ensures that no single regulator will be spread too thin as SPF expands to additional sectors as scam activity inevitably shifts. Regulators have access to significant civil penalties of up to $50 million for the very worst breaches of the SPF. This is designed to incentivise compliance and make sure it's not simply easier to pay the penalty. Regulators will also have other compliance tools available, such as infringement notices, enforceable undertakings, injunctions, public warnings and remedial directions to ensure the SPF is administered as intended—to protect consumers.

Consumers, for their part, will have access to free and transparent dispute resolution processes if they are victims of scams and one or more regulated entities have not met their obligations. There also needs to be internal dispute resolution at the regulated entities and a process in place at each of them, and they must become members of a designated external dispute resolution scheme. There will be a no-wrong-door policy for internal dispute processes, so, rather than being shunted around from regulator to regulator, consumers can approach any of the regulated entities connected to the scam they've experienced to raise a dispute. We want to make it easy for people to pursue that. We've already announced our intention to authorise the Australian Financial Complaints Authority, AFCA, as the external dispute resolution scheme for the three initial sectors. This single-door approach means consumers only have to go to one body to escalate their scam complaint, even where it may involve multiple regulated entities.

The government has not taken a mandatory presumption-of-reimbursement approach as operates in the UK, because we want to incentivise actions to address scam activity across the entire scam activity chain, not leave some sectors with lower expectations and lower responsibility for the liability. Placing liability on banks alone fails to recognise and hold to account the entities that may have had opportunities to stop the scam before the harm is caused to the consumer.

Consumers will also be able to take action in court when they've suffered loss or damage because a regulated entity hasn't met its obligations under the SPF. As with the intention for the external dispute resolution, liability for loss or damage where more than one regulated entity has not met obligations can be apportioned between multiple regulated entities. So this is about shifting the responsibility, ensuring everyone at every point takes responsibility for the things that they could do.

This is the start. There is work to do throughout the year once this bill is passed, and I hope it will be. What this bill does do is ensure that we deliver on the pre-election promise that we made, including to the people of the Hawkesbury at the forum at the Windsor Wolves footy club that the Assistant Treasurer attended. We made a promise that we would do everything we could to protect the community from scammers. This is a really significant step that gives Australia a world-leading framework to be able to do just that—to keep consumers safe.

Monique Ryan (Kooyong, Independent) Share this | Link to this | Hansard source

Australia is a honeypot for scams. Our lack of regulation and industry protection for consumers permitted more than 600,000 scams in 2023, a record number and an increase of 18.5 per cent on the previous year according to the ACCC. The National Anti-Scam Centre tells us that Australians lost $2.74 billion to scams in 2023, but its data is limited because it tells us only about those scams which have actually been reported to the ACCC's Scamwatch unit. Probably the best data is that from the Australian Bureau of Statistics, which, frustratingly, collects a much different dataset to that of the ACCC. The ABS reports that most scams are relatively low value, of the order of a few hundred or a few thousand dollars. It seems quite likely that scams of that size are underreported.

Almost 50 per cent of people affected by larger scale scams report them to their banks, but, critically, only 8.7 per cent report them to government organisations or departments. So the government's figures do not include scams that individuals only report their banks, to the telcos, to the police or to other government agencies like ASIC, the ACMA or the ATO. That means the figure we're given and often use—of almost $3 billion lost to scams in Australia last year—is more than likely a vast underestimation.

There are many reasons for the increasing prevalence of scams. The rapid digitalisation of the economy has had a dual edge. While online facilities and online banking have enhanced many of our individual conveniences, they have also facilitated the rise of scams. The reality is that for years the banks, telcos and digital companies have not taken the necessary steps to adequately protect customers. Australians have had to continue to experience serious financial and security harm in the face of this failed self-regulation. There is now a critical need for government and businesses to act effectively and with purpose to protect consumers from these increasingly devious and sophisticated schemes.

The Albanese government has taken a proactive stance to scams prevention, and it is appropriate to acknowledge the efforts of the Assistant Treasurer and his team and their deep engagement in this space. I have to say, as the co-chair and founder of the Parliamentary Friends of Scams Protection, that the Assistant Treasurer has been supportive and responsive, and I thank him for that.

Recent initiatives by this government have included the National Anti-Scam Centre, launching the SMS ID register and boosting ASIC's scam-disruption activities. These measures have decreased investment scams, but those on social media platforms continue to increase. Digital platforms, telcos and banks have not done enough to limit those losses. For example, the SMS ID registry needs to be mandatory. In Singapore, we've seen that a mandatory ID registry led to a 67 per cent reduction in scams. We have seen in this country what happens when institutions don't act on spoofed phone numbers. Probably the best example of that was HSBC's reckless and indifferent failure to respond to spoofing of many hundreds of Australians over many months. That led to a loss of millions of dollars by Australians, some of whom live in the electorate that I represent, Kooyong.

It is for this reason that the government is introducing mandatory industry codes for scam protection and detection and victim support and redress by banks, telcos and digital platforms. The government claims that, under this legislation, scam victims will have a straightforward path to securing compensation after a single complaint, even when their complaint involves multiple companies. The liability will theoretically be shared between the sending and receiving banks, digital platform and telco provider, depending on the scam. The first sectors to be designated under the Scams Prevention Framework will be banks, telecommunication providers and providers of digital platform services relating to social media, paid search engine advertising and direct messaging. Other sectors will be considered in time.

Under the legislation, banks will need confirmation-of-payee technology so that customers can check account names and other details to ensure that they're paying their money into the right bank account, and they will receive a warning if those details do not match. The Australian Banking Association says that this could be in place for all banks within 2025, although it is unclear why we can't have it immediately. After being informed of a scam, banks will have to report it to the authorities, and they will have to respond quickly, such as to stop payments going through. They will be required to identify and shut down money mule accounts used to receive and shift scam victims' money, usually offshore. We know that failure to do this has been a failure of many banks for some years. I've had a number of constituents contact me with horror stories related to our big and small banks, their willingness to transfer money too quickly, their inability to recover losses after the fact and the challenges of dealing with their networks.

This framework also covers telecommunication providers, telcos, who are required to ascertain who is sending text messages. They're required to block numbers making scam calls. It also applies to the digital platform service providers. Scam victims will be able to seek compensation from digital platforms and from telcos, as well as the sending and receiving bank. But they will have to do that by taking their case to the ombudsman, the Australian Financial Complaints Authority, or AFCA. In doing so, they can theoretically take a single action against multiple parties—banks, telcos and digital platforms, depending on the scam. The current maximal payout for a scam to be received by a consumer from AFCA is about $1.2 million.

The Australian Competition and Consumer Commission, or the ACCC, will oversee enforcement of this framework. Companies failing to meet their obligations face massive fines of up to $50 million, and they could be forced to compensate victims. The legislation provides for criminal and civil penalties if the legislation is breached.

It is very disappointing that the government has decided not to go ahead with the recommendation from experts and consumer groups that we follow the United Kingdom's approach of making banks primarily responsible for dispute resolution relating to scams. Since 2019, the United Kingdom has had a voluntary reimbursement model in place, which has recently become compulsory. Under the scheme, victims are protected while the industry has a financial incentive to improve its scam protection systems. Australian banks have claimed this approach would make us a honey pot for scammers, but that claim has been rejected by the UK regulator and by some banks. Nine senior consumer groups, including the Consumer Action Law Centre, CHOICE, the Financial Rights Legal Centre and Financial Counselling Australia, have repeatedly called for the Albanese government to adopt a modified version of the UK reforms.

The government's proposed Scams Protection Framework is well-intentioned and is a step in the right direction, but it falls down on this question of dispute resolution, which is, after all, the touchstone of protection from scams. The legislation sets up an unnecessarily complex multiparty case-by-case dispute resolution system. It would likely incentivise the industry to enforce a minimum standard compliance approach to obligations. It places the onus on scam victims to prove, presumably on the balance of probabilities, that the bank, the platforms and/or the telcos involved failed to meet their subjective and quite broad obligations under the Scams Protection Framework principles and codes, that the business's failure was the cause of the scam and that the scammer intended to deceive the victim. The problem is that, in many cases, the consumer has no access to the information required to prove the case. Banks refuse to hand over information at this point. Meta won't hand over its algorithms, and banks often won't release commercial-in-confidence data and systems. Given this information asymmetry, the task will likely be onerous and challenging for many individuals, especially older Australians and those from culturally and linguistically diverse backgrounds.

Consumer advocacy groups say the process will include a person reporting the scam, lodging a complaint with the companies involved, seeking advice, escalating the dispute to AFCA, participating in meetings and then getting an outcome—a process which could involve as many as 30 steps and take as long as two years. The Telecommunications Industry Ombudsman agrees; she says it is not reasonable that consumers have to jump through all those hoops while watching regulated entities blame each other for their failings. It's also unclear how apportionment could work in this context. There could well be protracted arguments, even litigation, between banks, telcos and digital platforms about which entity caused the loss and who is responsible for how much of the liability—all while the victim waits.

Take a toll scam. A consumer receives an SMS saying they have an overdue toll. The consumer thinks it's genuine because they travelled on a toll road two days before. They hit the link in the message and get scammed. Who's at fault? Is it the bank? Is it the telco? Is it the tolling company who sold the consumer's travel data through real-time bidding? Or is it the data broker? How is an individual to work through this issue? The reality is that, in most cases, they won't; they'll drop the issue and pay the money, and the scammer will continue unpunished.

The reality is that, without a presumption of reimbursement, there is no economic incentive for banks to improve their systems to prevent scams. A change to the Scams Protection Framework to introduce a presumption of reimbursement, within limits, would help the framework meet its stated objectives. It would significantly ease the burden on consumers by removing the onus to prosecute their case against multiple multinational corporations over what would likely be years-long disputes. Enabling faster reimbursements for scams victims would incentivise much more investment in scams protections.

The Consumer Action Law Centre and other expert groups have suggested an alternative model—a modified reimbursement framework which would lead the world on scams disruption and responses. This would be predicated on a presumption of bank reimbursement. In the model, the consumer would provide reasonable information to the bank. The bank would have five to 10 days to respond, and, in most cases, would then reimburse the scam victim. There would be limits to the presumption of reimbursement; for example, it would not be instituted where there is evidence of gross negligence or where a person knowingly took part in fraud. There would also be a backup option of a single-door external dispute resolution by AFCA where reimbursement is denied. The banks, telcos and digital platforms would then undertake apportionment after the consumer is reimbursed. That apportionment would be business-to-business at an industry level between SPF entities.

The model would create an incentive to drive industry action to innovate and invest in the technology and systems required to prevent scams. It would reduce the scam complaints process from as much as two years under the framework proposed in this bill to just a few weeks, with consumers, government regulators, dispute resolution bodies and businesses all set to benefit from the efficiency gained and the reduction in costs.

This country urgently needs a robust, well-enforced framework of consumer protections. For far too long, too many Australians have lost life-changing sums of money to scammers. For far too long, the businesses enabling scammers to conduct their activities have faced no consequences, leaving consumers to carry the burden of those crimes. It's a simple premise: consumers should be able to get their money back when businesses fail to protect them from scams.

This framework is well intentioned. It sets the scene for meaningful protection from scams. But it provides only half of the picture. We could do much better. Firstly, the government's SMS sender ID registry should be mandatory rather than voluntary. Secondly, the government should reverse the onus of proof for scams restitution—to institutions and away from individuals. Only by doing so can we maximise consumer protections and the incentives for institutions to improve their systems to stop scams and protect Australians from financial harm.

Carina Garland (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

This piece of legislation, the Scams Prevention Framework Bill 2024, is going to be very welcome in my electorate. I've held a number of scams forums over the last few years, in Wheelers Hill, Burwood, Glen Waverley, Mount Waverley and suburbs beyond, and they've been incredibly well attended events because there is huge community anxiety about the proliferation of scams. There is also a real sense of relief that our government is taking steps to crack down on scammers. My office has given out countless copies of the The LittleBook of Scams, and I'll use this opportunity in the parliament to remind my constituents that they can contact our office at any time to receive their free copy.

Our government has taken really seriously the responsibility to crack down on scammers. We made a promise ahead of the last election to protect the community from scammers, and, since being elected, our government have committed over $180 million to combat scams and online fraud. So far, there have been really positive signs from our efforts to combat scams. Yet, unfortunately, scam losses do remain unacceptably high. In 2023, scammers stole $2.7 billion from Australians, and scammers continue to cause real psychological and emotional harm to victims and their families. I'm sure most members in this place have had the experience of sitting with, speaking to and listening to constituents who have unfortunately fallen victim to scammers. Scammers are very sophisticated in the way they operate, and anyone can be a victim of their actions.

Current scam protections are piecemeal and inconsistent across the economy, and, therefore, consumers face inconsistent protections and responses from different industries and providers. The Scams Prevention Framework being introduced in this bill is world-leading legislation and a central part of our broader consumer protection agenda, which is economy-wide reform—moving away from that inconsistency that we've seen. This economy-wide reform is designed to protect consumers from scams by requiring the private sector to adhere to consistent principles based obligations and strong tailored industry codes which are enforceable.

The consistent and enforceable approach of the Scams Prevention Framework will ensure that incentives and obligations are in place across key sectors that scammers take advantage of to cause deep harm in the community. The Scams Prevention Framework will ensure that all parts of the ecosystem used by scammers are equally held to account for implementing strong and effective protections that are tailored to that sector's role in the conduct of a scam. This is really essential for the protection of consumers, as its common for scammers to use multiple platforms and services to deceive and steal from people.

Regulated entities will be required to take reasonable steps to prevent, detect, report, disrupt and respond to scams and to have governance arrangements in place relating to how entities will protect consumers from scams. Mandatory sector-specific codes will provide tailored prescriptive obligations to each sector which are consistent with the principles; however, the sector-specific codes do not relieve a business from its obligations to take reasonable steps in all circumstances. Recognising that scams are constantly evolving, businesses must be evolving in their response as well.

Banks, telecommunication providers and certain digital platforms offering social media, paid search advertising and direct messaging services will initially be designated under the Scams Prevention Framework, as they represent key factors of harm for consumers. Bank transfer was the most reported payment method used by scammers, with $212.9 million in reported losses in 2023, according to Scamwatch. Phone calls and social media were the contact methods associated with the highest value of losses. In 2023, these losses were $116 million for phone calls and $93.5 million for social media contact. Again, this information comes from Scamwatch.

Just as a sidenote, Scamwatch is a really important way for the government to keep track of what scammers' activity is. I myself have made complaints and reports to Scamwatch when scammers have attempted to trick me, so I encourage people to put a report through to Scamwatch when they are contacted by scammers.

Other sectors such as superannuation, cryptocurrency, online marketplaces and other payment providers may be designated under the Scams Prevention Framework in the future. A multiregulator model involving the ACCC as the regulator for the principle based obligations and the ACCC, ASIC and ACMA as regulators for the sector-specific codes capitalises on existing industry knowledge and expertise. This is really important. This will ensure that no single regulator will be spread too thinly as the Scams Prevented Framework expands to additional sectors as scam activity shifts.

Regulators have access to significant civil penalties of up to $50 million for the most egregious breaches of the Scams Prevention Framework. This is intended to incentivise compliance and provide adequate penalties to deter regulated entities, who may foresee high possible gains, from breaching the Scams Prevention Framework. Regulators will also have other compliance tools available, such as infringement notices, enforceable undertakings, injunctions, public warnings and remedial directions, to ensure the Scams Prevention Framework is administered as intended to protect consumers.

Additionally, consumers will have access to free and transparent dispute resolution processes if they are the victim of a scam and one or more regulated entities has not met its obligations. Regulated entities must have an internal dispute resolution process in place and become a member of a designated external dispute resolution scheme. With a no-wrong-door approach to internal dispute processes, consumers will be able to approach any regulated entity connected to the scam they've have experienced to raise a dispute. It is really important, too, that no-one is turned away when they make that initial step to raise a dispute.

The government have already announced our intention to authorise the Australian Financial Complaints Authority as the external dispute resolution scheme for the three initial sectors. This single-door approach means consumers will only have to go to one body to escalate their scam complaint, even where it may involve multiple regulated entities.

I've listened so far to some of the speeches that have raised the question of a mandatory presumption of reimbursement approach, such as the one the UK has in place. Our government has decided not to take that approach, because we want to incentivise actions to address scam activity across the entire scam activity chain, not leave some sectors with lower expectations and lower responsibilities in relation to their liability. Placing liability simply on banks alone fails to recognise and hold to account the entities that have many opportunities to stop a scam before the harm to the consumer is caused.

Our government will consult on the Scams Prevention Framework dispute resolution model to ensure that alternative dispute resolution operates effectively. Consumers of course should be able to rely on protections and raise their complaints with all regulated businesses under consistent expectations of how they will be treated. Consumers will also be able to take action in court where they have suffered loss or damage because a regulated entity has not met its obligations under the Scams Prevention Framework. As with the intention for external dispute resolution, liabilities for loss or damage where more than one regulated entity has not met obligations can be apportioned between multiple regulated entities. Again, this is about ensuring we recognise the scam activity chain.

Scams are a global challenge. The Assistant Treasurer's attendance at the inaugural Global Fraud Summit, in the UK in March of last year, really reiterated the important role and influence of Australia and of our government in fighting scams within the international community. This legislation will support our government's efforts and industry's efforts in international engagement and collaboration, including by enabling the sharing of scam intelligence across regulated entities, law enforcement and regulators in Australia and, importantly, by supporting international enforcement action to disrupt illicit scam activities, as, of course, this is a global challenge and we are often engaging with global operators here in the scam activity space.

I know this is really welcomed by my community in Chisholm. People frankly have had enough of being targeted by scammers, and it seems to come sometimes from all directions, as we've described in our comments—the government's contribution. This is something that people are experiencing on social media, via phone calls and via emails. I'm really proud to be part of a government that is taking serious action to protect our communities from the despicable actions of scammers, and I commend the bill to the House.

Zoe Daniel (Goldstein, Independent) Share this | Link to 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.

Jerome Laxale (Bennelong, Australian Labor Party) Share this | Link to this | Hansard source

Fighting scams has been one of my personal priorities since I came to this place. I've got the privilege of serving on the House Economics Committee, and, through public inquiries, I've pushed for stronger protections for scam victims and demanded greater accountability from banks, telecommunications providers and digital platforms. In my time here, I've questioned the big banks directly on their inconsistent responses to scams and raised the need for a coordinated approach to tackle these crimes.

When I sat down to write this speech, it made me reflect on the experiences that people in my electorate have shared and how they will be personally impacted by this legislation. I want to share two stories with you. Amy from North Epping contacted my office after losing over $1,000 in what she thought was a safe transaction through a social media chat group. She acted quickly, filing a police report and notifying her bank within an hour, but was told that the recovery of her funds was unlikely. She expressed her frustration with the 10-day investigation period and the lack of immediate measures to halt fraudulent transfers. Then there's Sonny, who trusted a professional-looking offer to transfer over $80,000 into what he thought was a high-interest account at an established bank. Everything about the scam seemed legitimate, from the paperwork to the communication. It wasn't until he realised the fraud that he discovered the money was gone. Despite reporting his case to the bank and to the police, his funds remain unrecovered and he's left with no clear path forward.

This legislation is for people like Amy and Sonny. It's for the Australians who have been let down by gaps in our system and who deserve better. It's for the communities, families and individuals who expect the government to do something to keep their money safe. There are thousands upon thousands of Australians who have played by the rules, who trusted the systems that they relied on and still found themselves targeted by sophisticated criminals. It's not just their financial stability that's shaken; it's their confidence, their peace of mind and, in many cases, their relationships with their family and friends and with the institutions they thought would protect them.

In 2023 alone, Australians lost $2.7 billion to scams. Behind every dollar stolen is a person, a family or a small business left to pick up the pieces. It's the retiree who loses their life savings through a fraudulent investment scheme. It's the small business owner unable to pay staff because they were tricked into sending lots of money to a fake supplier. It's the parent who thought they were securing their child's future, only to see their savings vanish. These are not hypothetical scenarios; they're real stories I've heard time and time again. These scams do not just take money; they take trust. They exploit the systems and institutions we all rely on.

The numbers, while staggering, only tell part of the story. Behind each dollar lost are people dealing with the emotional distress, shame and even mental health challenges that arise from being deceived. The retiree who sees their financial security evaporate overnight is left questioning their judgement and wondering how they will make ends meet. The small-business owner who transfers funds to a scammer is facing not just financial hardship but also the weight of their staff's livelihoods. And the family who loses their savings is forced to navigate the heartbreak of rebuilding what was meant to be a foundation for the next generation. Scams do not just take money; they take trust. It's very important that we restore that trust.

For years, the response to scams has been fragmented. Protections have varied across industries, and, while some sectors have taken steps to improve, others have lagged behind. This piecemeal approach has left Australians vulnerable and has created an environment where scammers can operate willy-nilly. The inconsistencies in how industries respond to scams mean that whether or not you are protected can depend more on luck than any systemic safeguard. This legislation changes that. The Scams Prevention Framework introduced in the bill is the first economy-wide reforms designed to tackle scams comprehensively. It ensures that every sector scammers exploit—that is, banks, telecommunications providers and digital platforms—are all held to account equally. Under this framework, regulated entities will be required to take reasonable steps to prevent, detect, report, disrupt and respond to scams.

This isn't just about reacting to scams as they occur; it's about preventing them from happening in the first place. It's about strengthening the systems that scammers exploit, whether that's the SMS service used to send fraudulent messages or spoof centre IDs, the social media platforms used to post fake ads—and we've all seen them—or the banking systems used to move stolen money. This legislation ensures that all known areas are covered and that every player is equally responsible for protecting people's money.

What sets this framework apart is its enforceability. Industries have for too long been able to shirk responsibility with little consequence for their inaction. This legislation ensures that regulators have the tools they need to enforce compliance. Civil penalties of up to $50 million will apply to the most egregious breaches, sending a clear message to everyone involved. Failing to protect consumers is not an option. For victims, this legislation provides clear pathways to seek redress. Regulated entities will be required to establish internal dispute resolution processes and participate in external schemes like the Australian Financial Complaints Authority. Victims will not have to navigate a confusing maze of responsibilities; they will have a single, straightforward process to get the help they need.

This legislation also recognises that scams do not happen in isolation. They involve multiple touch points: a fraudulent text message, a fake social media ad, and that bank transfer. That's why this framework takes a holistic approach, requiring all sectors involved in the scam ecosystem to work together. Whether a telco blocks the scam call, a social media platform removes the fake ad or a bank stops a suspicious transfer, every part of the system has a role to play. This collaborative approach is essential because scammers don't respect boundaries between industries—they actually exploit them.

Some, like the member for Goldstein, have argued for a mandatory reimbursement model like the one in the UK, where only the banks are required to compensate victims of scams. Where this legislation is better is that it puts all those involved on the hook. Scams don't start and end just with banks; they begin with fraudulent messages and deceptive advertising. Focusing solely on banks ignores the critical role that the telecommunication sector and the social media sector play in perpetrating scams and also the role they need to play in preventing scams. This legislation deliberately takes a broader view, and that idea of shared responsibility underpins the framework. The banks will have to monitor suspicious transfers and strengthen their fraud detection systems, telecommunications providers must take proactive measures to block scam messages and calls, and digital platforms must crackdown on the spread of fake ads and fraudulent schemes. These are not optional actions—they are the fundamental obligations of this legislation.

We want to take scams seriously, and we've done that since coming to government. Since we've come to government we've opened the National Anti-Scam Centre and we've seen the first sustained reduction in scam losses in years—a 43 per cent decrease in scam losses in the final quarter of 2023 compared to the same period the year before. These results are promising, but they are just the beginning. This Scams Prevention Framework builds on these early successes, ensuring that we have the tools to continue driving down scam losses and protecting Australians. We're sending a message to these criminals that Australia is not the place to conduct your illegal business.

This legislation is also forward-looking. It recognises that scammers are constantly adapting their methods, exploiting new technologies and finding new ways to deceive. That's why this framework allows for other sectors, such as cryptocurrency platforms and online marketplaces, to be brought under its umbrella in the future. It ensures we can respond to emerging threats and stay one step ahead of the scammers. Cryptocurrency scams, for example, have become a significant concern. Australians have lost millions of dollars to fraudulent schemes involving digital currencies, which are often promoted through social media ads that, once again, appear legitimate. These scams exploit the excitement and confusion surrounding new technologies, making them particularly dangerous. By including provisions to expand the framework as needed, the legislation ensures we can address emerging threats without delay. The futureproof nature of the legislation is critical in an era when scammers are always evolving. By creating a flexible framework that can adapt to include new sectors, it ensures a future government will not be caught off guard.

I'd encourage all those who listen to this speech or read it at a later time to compare our approach to scams of that of the former government. Not much happened under the Liberals in regard to scams. Their approach was essentially to say to victims that they were on their own—that they should have been smarter, done better or not fallen victim to the work of sophisticated criminals. Well, that's not our approach. Where we see a need to help Australians and keep their money safe, we'll step in. This legislation shows that we're listening to Aussies who have asked us to protect them from criminals and to help them protect their money. This legislation is about keeping Australians safe by ensuring the money they earn is protected from criminals and that, if they still fall foul of it, there are open and transparent rules on how to recoup lost money in circumstances that are outlined in this bill. To help people do that, extra funding has also been provided to the Australian Financial Complaints Authority to bolster their methods to help Australians recover lost funds.

We know that scams aren't just an Australian problem; they're a global challenge. Criminal networks operate across borders, targeting victims worldwide. What we need to do is make sure that Australia is no longer a soft target for these criminals to exploit our most vulnerable Australians. This legislation positions Australia as a leader in the international fight against scams. It supports intelligence-sharing between regulators, law enforcement and industry both here and overseas. It will ensure that Australia remains at the forefront of global efforts to disrupt scam models as they pop up across the world. At a global fraud summit earlier this year, Australia's approach was highlighted as a model for effective action. It builds on that recognition, ensuring that we continue to lead the way in protecting Australians. This legislation ultimately is about fairness. It's about ensuring the burden of scams doesn't fall solely on victims, and it's about making sure that every industry that profits from the digital economy also takes social responsibility to protect it. It's about holding everyone in the scam ecosystem accountable for their roles in preventing and responding to these crimes. Yes, banks should be held accountable, but telecommunications companies and, importantly, the companies behind social media, where most scams begin and end, absolutely have to step up, be part of this legislation and be held responsible by it. Here, we want to ensure we stand up for everyone's right to feel safe online, to trust the systems they rely on and to keep the money they've worked so hard to earn.