Government to target corporates in fight against online scams

Australia’s laws to protect victims of online money scams are not fit for purpose, but that’s about to change, according to Assistant Treasurer Stephen Jones.

Speaking at the National Press Club on Wednesday (31 July), Mr Jones said banks, telcos and social media companies will be forced to take more responsibility for the $2 billion-plus being lost each year to scammers.

Citing numerous examples of how, even after checks and precautions, too many Australians are falling victim to fraudsters posing online to be someone they are not, Mr Jones, who is also Financial Services Minister, said corporate entities used in the process will no longer be able to claim innocence.

He said banks are doing too little to prevent illegal transactions, and current laws do not make it easy for victims to get their money back.

“A fundamental characteristic of scams is that they are transactions that are authorised – through deception – by the victim, so the law is not fit-for-purpose,” Mr Jones said.

“We will address this to ensure victims can receive compensation in the right circumstances.

“Compensation for inaction, for negligence, for failing to meet an obligation is a critical part of our framework.”

Mr Jones saved his harshest criticisms for social media platforms that allow scammers to operate and profit from the activity.

“Digital platforms have a moral obligation to join the fight as part of their social licence,” he said.

“These are trillion-dollar corporations. They can afford to invest in a significant uplift to keep consumers safe.

“It’s really time for them to get on the side of consumers.”

Describing it as “offensive” how badly the multinational social media giants are claiming innocence on the issue, Mr Jones said they could no longer turn a blind eye to allowing scammers to use their networks to target innocent victims.

“They accept the revenue that comes from these criminals placing scam ads on their platforms,” he said.

Social media scams are rising in Australia, in contrast to a decline in scams generally across the country.

“Scam losses originating on social media were up 17 per cent in 2023,” Mr Jones said.

“Scam reports were up 31 per cent and the social media companies are dragging their heels.”

A fall in overall scam losses last year made it the first annual reduction since 2016. Mr Jones claimed it was a direct result of Federal Government intervention.

Australian consumers lost $2.74 billion in 2023, which was down 13 per cent on the year before.

The government’s anti-scam measures already implemented appear to be having an impact, but the second phase of measures will more acutely target the rise in social media scams.

New rules to be introduced will involve penalties for the corporates, as well as a suite of preventive steps that must be followed; and banks will have to take greater care in controlling transactions and act against fake accounts.

A new mandatory code for combatting scams will also be introduced.

“If there is a breach of the code, the bank, telco or digital platform will be held to account,” Mr Jones said.

“If they drop the ball, they will be liable to compensate the victim.”

AI deepfakes are increasingly being used to impersonate people, and Mr Jones said steps must be taken before scammers embrace this technology to target online victims.

Laws targetting deepfake use for illegal activity are in train.

“We are developing the legislation right now, hoping we are able to get it into parliament as soon as possible,” Mr Jones said.

“It is a priority of the Prime Minister. It will be a game-changer.

“The threat will evolve as technology changes. Artificial intelligence brings lots of benefits, and I don’t want to talk about it in dystopian terms either, but we know already that it is being used to create deepfakes of celebrities promoting investment scams.

“Can you imagine the danger that will follow when they start to impersonate you or your loved ones?”

Mr Jones noted that half of all scams still occur via phone or text message and usually involve bank transfers.

Preventive action is more vital than reactive measures, he said, but the Federal Government was using all the tools at its disposal to combat the scourge of online scams.