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A Treasury consultation paper proposes a sweeping, “whole-of-ecosystem” approach to prevention.
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Raise scam defences or face penalties, business told
01 December 2023
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10 minute read
Businesses will be forced to step up their anti-scam measures or face heavy penalties under the government’s proposed scam code, which creates mandatory obligations for the private sector to “prevent, detect, disrupt and respond to scams”.
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The Scams Code Framework, announced by Assistant Treasurer Stephen Jones on Thursday, would also prioritise imposing sector-specific obligations for businesses that are more frequently targeted by scammers like banks, telecommunications providers and social media platforms.
“Today, the Albanese Government takes the next step in its commitment to fight scammers, announcing public consultation on proposed tough new, mandatory industry codes for the private sector,” Mr Jones said.
“These tough new codes would make it really clear what the obligations are on industry to prevent scams and better protect people and businesses.”
The proposed framework is the latest initiative in the government’s $86.5 million anti-scam campaign, after launching the National Anti-Scam Centre within the ACCC in July and developing a scam website takedown service with ASIC in November.
While the ACCC estimated that consumers lost $3.1 billion to scams last year, the only sector that currently faces scam prevention obligations was telecommunications, the consultation paper said.
“The government considers that more needs to be done to consistently uplift practices and reduce opportunities for scammers to exploit gaps and weaknesses within and across sectors to steal from and harm consumers,” it said.
“The primary objective of the framework is to set clear roles and responsibilities for the government, regulators, and the private sector in combatting scams. This includes ensuring that key sectors in the scams ecosystem have measures in place to prevent, detect, disrupt, and respond to scams, including sharing scam intelligence across and between sectors.”
The consultation paper said the Scams Code Framework was based on three “principles”: A “whole-of-ecosystem” approach, flexibility to respond to changes and the need to “complement and leverage existing interrelated regimes, systems and initiatives”.
Under the framework, businesses would be required to “develop, maintain, and implement an anti-scam strategy”, subject to review by the ACCC, that sets out its approach to “scam prevention, detection, disruption and response”.
Additionally, they would have to provide consumers or users with information about how to identify and minimise the risk of being scammed as well as train staff to identify and respond to scams.
Reporting obligations would also increase, with the framework mandating businesses to take “reasonable steps” to notify other businesses and authorities promptly about scam activity, and to keep records of incidents.
For businesses that operate in telecommunications, banking and digital media, stricter obligations specific to their sector would also apply.
Communications Minister Michelle Rowland said the proposed changes would be “tailor-made for each sector” to keep consumers safe.
“Disrupting these sophisticated criminals is a whole‑of‑society effort. Government, industry and the community all have a role to play,” she said.
The consultation paper said businesses that failed to comply with the code would face penalties under the Competition and Consumer Act.
“Where a business does not meet its obligations under the framework, where applicable, internal and/or external dispute resolution mechanisms would ensure consumers have access to appropriate redress, and regulators would be given new enforcement and penalty powers,” it said.
Consultation on the government’s proposal is open until January 29, 2024.
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