In response to the escalating scam crisis that cost Australians $2.7 billion in 2023, the government has unveiled a comprehensive Scams Prevention Framework. This economy-wide reform aims to protect the Australian community from increasingly sophisticated scams that exploit the digital economy.
The framework, primarily amending the Competition and Consumer Act 2010, introduces strong obligations across multiple sectors to drive meaningful action against scam activity. Initially, it will target banks, telecommunication providers, and digital platform services, including social media, paid search engine advertising, and direct messaging services.
Key features of the framework include:
- Broad Protection: The framework will safeguard Australian residents (including those abroad), visitors to Australia, and small businesses with less than 100 employees.
- Comprehensive Definition: “Scam” is defined broadly to capture both successful and unsuccessful attempts to deceive consumers, resulting in loss or harm.
- Strong Obligations: Regulated entities must take reasonable steps to prevent, detect, report, disrupt, and respond to scams, as well as implement appropriate governance arrangements.
- Sector-Specific Codes: The Treasury Minister will introduce detailed, mandatory obligations for each regulated sector, allowing for flexibility in addressing sector-specific scam activities.
- Multi-Regulator Approach: The Australian Competition and Consumer Commission, Australian Securities and Investments Commission, and Australian Communications and Media Authority will enforce the framework across different sectors.
- Dispute Resolution: Regulated entities must provide internal dispute resolution mechanisms, and join an external dispute resolution scheme, likely the Australian Financial Complaints Authority for the initial designated sectors.
- Tiered Penalty Regime: Significant penalties for non-compliance, with fines up to $50 million or 30% of turnover for the most serious breaches.
The framework also strengthens the National Anti-Scam Centre, established in July 2023, which combines government and private sector expertise to disrupt scams and share intelligence in real-time.
As scammers continue to evolve their tactics, this new framework represents a significant step in protecting Australians from financial harm. It emphasises a whole-of-ecosystem approach, recognising that industry, government, and consumers all have crucial roles to play in combating the scourge of scams in the digital age.
The government is currently seeking stakeholder feedback on the draft legislation, particularly regarding privacy implications and compliance costs. This consultation process aims to refine the framework further before its implementation, ensuring a robust and effective defence against the growing threat of scams in Australia.
For a full reading of the exposure draft, see here.
