Australian Greens Senators' additional comments

1.1In 2023 tens of thousands of people across the country lost over $2.7 billion to scammers.[1]This represents significant harm for too many Australians and their families. Australia is lucrative for scammers because Labor and the Coalition have failed to implement a comprehensive regulatory framework leaving it largely to industry to undertake voluntary prevention measures. As a result, protections against scams are piecemeal and inadequate, often leaving people with no avenue to recover scam losses. This is reflected in the data, as currently people, not businesses, pay for 96 per cent of scam losses.[2]Australia is lagging behind the rest of the world in our response to scams.

1.2Labor’s Scams Prevention Framework Bill could have been a much needed opportunity to crack down on the harm caused by scams. Disappointingly, Labor has chosen to prioritise the interests of their political donors - the major banks with their multi-billion-dollar profits - over the interests of everyday people. As a result, the Bill in its current form will fail to adequately prevent scams from occurring in the first place or support people impacted by scams to quickly seek redress.

1.3A joint submission to the exposure draft legislation representing nine consumer organisations, including Consumer Action Law Centre, calculated that to seek redress for a scam under the Framework, a typical person would have to go through an almost 30 step process that would take up to two years.[3]Even worse, at the end of the process there is no guarantee they would get any of their money back.

1.4This is because the Bill places the onus on a person who has been scammed to take on their bank, telco and/or social media platform to prove that the entity did not meet their obligations under the Framework or under any sector specific code. The joint consumer organisation submission describes this as a ‘complex, legalistic, time and resource draining task for the consumer’.[4]It pits an individual against ‘well-resourced multi-national corporations such as Meta and Google, or a major bank or telco’ in a ‘David and Goliath’ battle.[5]

1.5If a person manages to make it through this convoluted process, a business is only liable to reimburse them if the person can prove the business did not comply with their obligations under the Framework. This means there is no guarantee a person who is scammed will get any of their money back. The Law Council of Australia indicated in their submission to the Bill inquiry that the proposed laws ‘would primarily result in compensation being denied to SPF consumers’.[6]

1.6The consumer organisations also rightly highlight that, as businesses are not presumed to be liable for scams losses, the Framework creates a system that allows them to do bare minimum ‘tick-a-box’ activities to comply with their obligations instead of incentivising them to do everything they can to stop scams from occurring in the first place.[7]

1.7Labor’s proposed framework is far from best practice. For years, consumer organisations have consistently called for a model based on the United Kingdom’s (UK) approach.[8]In 2019, the UK introduced a presumptive reimbursement model which was made mandatory in 2023. Under the model, banks are required to reimburse most scam losses within five days of receiving a claim with a cap of up to AUD$167 000. In evidence presented to the Senate Committee hearing, Consumer Action Law Centre CEO, Stephanie Tonkin, indicated the UK model has been effective, and most recent data shows UK scam losses have reduced by 12 per cent between 2023 and 2022.[9]

1.8The joint consumer organisation submission recommends a modified version of the UK model that would include a presumption of bank reimbursement, but allow the bank to share liability for the scam loss between other regulated entities involved in the scam, after the consumer has been reimbursed.[10]This approach improves on the UK model by ensuring all businesses involved in the scam, including banks, telcos and digital platforms share responsibility for the loss.

1.9The Greens support this model because it is evidence based and places the interests of people, not corporations, at the centre. It ensures people who are scammed are quickly reimbursed at the point where they lost their money, and banks, telcos and digital platforms are incentivised to innovate to prevent scams from occurring in the first place.

1.10A media release accompanying the joint consumer group submission stated that without reimbursement at its core, Labor’s Scam Prevention Framework is simply ‘not going to work’.[11]

1.11Instead of listening to consumer organisations, Labor has caved to the big banks by designing a Bill that protects the banks from having to take responsibility for scams rather than provide a solution that would incentivise banks and other corporations to prevent scams from occurring and support people who have been scammed to quickly get their money back.

1.12Even other industry groups were concerned that Labor prioritised the interests of the major banks over other industries. For example, DIGI, which represents the tech industry noted in their submission to the exposure draft:

While it appears that there has been intense and ongoing consultation since 2022 with the Australian Banking Association on the Framework, the same level of consultation has not occurred with other regulated industries about the model.[12]

1.13DIGI referenced Treasury documents released under freedom of information, which state that ‘Treasury has met regularly with the Australian Banking Association and member banks to align Government and industry efforts’ in relation to this legislation.[13]

1.14Labor has yet again made a clear choice to support the multi-billion-dollar profits of the big banks over the interests of ordinary people.

1.15The Greens support the consumer organisations call for a presumption of reimbursement to ensure the Framework places the onus on massive corporations, including the big banks, to prevent scams and supports people to quickly recover scam losses.

1.16The Scams Prevention Framework Bill 2024 should be amended to include a presumption of reimbursement at its core.

1.17The Greens also want to bring into Australian jurisdiction the multi-billion-dollar tech companies regulated under the bill. Unless steps are taken to bring offshore digital platforms under Australian domestic, corporate, criminal and consumer laws, any reform will be difficult, if not impossible, to enforce.

1.18The Joint Select Committee Inquiry into Social Media and Australian Society, heard from many witnesses about the barriers to legal accountability, and the ability of platforms to avoid legal redress or accountability for harms done on their platforms. Even basic service of legal documents on Meta to commence a legal action appears to be impossible in Australia.

1.19The Committee recommended that: the Australian Government consider options for greater enforceability of Australian laws for social media platforms, including amending regulation and legislation, to effectively bring digital platforms under Australian jurisdiction. The Greens supported this recommendation and further recommends herein that the government act urgently to do so.

1.20If the government is serious about reining in the power of the tech giants, combating scams and keeping our kids and communities safe online, then they will make sure any legislation is actually enforceable on those they seek to hold to account.

1.21The Australian Government urgently act to bring digital platforms under Australian jurisdiction and ensure jurisdiction is not an impediment to enforcement measures in the bill.

Senator Nick McKim

Member

Greens Senator for Tasmania

Footnotes

[1]National Anti-Scam Centre, Targeting scams, www.nasc.gov.au/reports-and-publications/targeting-scams, (accessed 3 February 2025).

[2]Australian Securities and Investments Commission, Anti-scam practices of banks outside the four major banks, Report 790, August 2024, p. 3.

[3]Joint Consumer Organisations, Submission to Treasury consultation: Scams Prevention Framework – exposure draft legislation, pp. 45–46.

[4]Joint Consumer Organisations, Submission to Treasury consultation: Scams Prevention Framework – exposure draft legislation, pp. 9 and 16.

[5]Joint Consumer Organisations, Submission to Treasury consultation: Scams Prevention Framework – exposure draft legislation, p. 9.

[6]Law Council Australia, Submission 37, p. 15

[7]Joint Consumer Organisations, Submission to Treasury consultation: Scams Prevention Framework – exposure draft legislation, p. 10; Ms Carol Bennett, Chief Executive Officer, Australian Communications Consumer Action Network (ACCAN), Committee Hansard, 28 January 2025, p. 19.

[8]Ms Stephanie Tonkin, Chief Executive Officer, Consumer Action Law Centre, Committee Hansard, 28 January 2025, p. 18.

[9]Ms Stephanie Tonkin, Chief Executive Officer, Consumer Action Law Centre, Committee Hansard, 28 January 2025, p. 18; Payment Systems Regulator, Authorised push payment (APP) scams performance report, July 2024, p. 6.

[10]Joint Consumer Organisations, Submission to Treasury consultation: Scams Prevention Framework – exposure draft legislation, p. 3.

[11]FST Media,Scams Prevention Framework ‘won’t work in current form’: CALC, 9 October 2024.

[12]Digital Industry Group Inc. (DIGI), Submission to Treasury consultation: Scams Prevention Framework – exposure draft legislation, p. 3. 3

[13]Treasury, Freedom of Information document 3575: Document 1, p.31.