The Assistant Treasurer and Minister for Communications have announced the release of the exposure draft of the Scams Prevention Framework legislation and explanatory materials for comment.
The framework establishes scam prevention principles in legislation that will guide industry‑specific, mandatory obligations on designated sectors. The principles create obligations to prevent, detect, report, disrupt, and respond to scams and to establish governance systems accordingly.
“Australians are losing too much money to scams, and while we’ve bucked the international trend where scams are doubling every year, losses are still far too much,” said Assistant Treasurer and Minister for Financial Services Stephen Jones. “The way to address that is to put strong obligations on the key businesses within the scam’s ecosystem.”
The legislation establishes a new part in the Competition and Consumer Act 2010 (CCA), enabling the Australian Competition and Consumer Commission to impose the full force of the law against businesses in designated sectors that fail to meet their obligations. This includes penalties of up to AUD50 million for non‑compliance under the CCA.
Once legislation passes Parliament, the framework will:
- Enable the minister to designate sectors and establish sector-specific codes. The codes will impose mandatory obligations on designated sectors to combat scammers and protect Australians. The minister will initially designate banks, telecommunication service providers, and a range of digital platform services related to social media, paid search engine advertising and direct messaging services.
- Mandate designated sectors to have internal dispute resolution mechanisms that are accessible and transparent for customers.
- Enable an external dispute resolution (EDR) scheme to be nominated for all scam complaints made under the framework.
- Build a coordinated intelligence-sharing ecosystem by mandating timely reporting and information sharing across industry and government.
- Under the framework, designated entities must be a member of the prescribed EDR scheme to provide a regulated service in Australia. The government’s intention is that the Australian Financial Complaints Authority (AFCA) will operate the single EDR scheme for the first three designated sectors.
- A single EDR scheme will provide victims with a clear pathway for redress where the entity has done the wrong thing. This will create end-to-end accountability across the initial designated sectors when a scam victim makes a complaint.
The government has provided over AUD154 million in the 2024-25 and 2023-24 Budgets to tackle scam activity across the economy.
“Cracking down on criminals trying to rip off hardworking Australians is a priority for this government,” said Minister for Communications Michelle Rowland. “The Scams Prevention Framework builds on the package of reforms the Albanese Government is already delivering to protect Australians from scams, including the Sender ID Register, which is being established to block fake SMS duping Australians.”
Exposure draft legislation and explanatory materials can be found on the Treasury website. Submissions will remain open until October 4, 2024. Interested parties are encouraged to share their feedback, which will shape the development of a final bill for introduction to Parliament later this year.
