It’s a scam-filled Summer. Don’t get comfortable.
By Rob Neely (pictured), Managing Director at Securely
It’s peak shopping season. The height of summer sales is great news for consumers – and it’s even news better for scammers.
The trouble is they don’t take a holiday like the rest of us.
In fact, it’s even worse. Scammers are getting smarter, more coordinated, and innovative in their tactics with every passing month.
Their work is growing at scale across the globe and particularly in wealthy nations like ours. It’s an uncomfortable, unspoken reality that’s impacting millions of people who have suffered the shock, shame, and indignity of watching their life savings slip away.
Most of us know friends and family members who found themselves sitting around the kitchen table stunned and scared about the future after being scammed.
Here’s the official numbers. In 2022, Australians fell victim to scams amounting to a staggering $3.1 billion in reported losses, marking an alarming 80 per cent increase from the previous year.
However, our own research reveals the real number is closer to $9 billion and rising exponentially. Approximately 2 in 3 Australians have been exposed to scam attempts.
Looking back on 2023, it’s no secret cost-of-living issues have dominated the news and government agendas, as they should. Yet scams, fraud, and identity theft are an even greater cause for concern.
We just don’t have the right words to talk about what’s going on. And even more troubling for industry experts and advocates like myself, meaningful action is taking too long.
Progress is patchy, inconsistent, and not properly coordinated.
For example, on November 30, 2023, the Assistant Treasurer, the Hon Stephen Jones MP, and the Minister for Communications, the Hon Michelle Rowland MP, unveiled a proposed Scams Code Framework (‘the Framework’) and initiated a public consultation process.
Yet Australia’s pivotal financial intelligence agency and regulatory body, AUSTRAC, was missing in action. This organisation regulates financial transactions to prevent money laundering, terrorism financing, and other financial crimes.
Given that proceeds of scams often find their way into our financial system before being transferred overseas, AUSTRAC’s expertise in tracking financial flows is indispensable.
Ministers Jones and Rowland announced the framework’s objective is to establish a comprehensive and coordinated strategy to combat the growing threat of scams in Australia.
It draws upon insights gathered from targeted consultations with regulators, industry representatives, consumer groups, and individuals affected by scams, ensuring a well-informed and inclusive approach to tackling this critical issue.
And yet mysteriously, AUSTRAC appears missing in action when it comes to this framework.
Why didn’t the government include AUSTRAC in the framework consultation?
It reflects a pattern we’ve seen for years. Efforts to counter scams have often been fragmented, residing primarily within individual businesses or sectors, resulting in an uneven application of preventative measures.
Current anti-scam measures in Australia are disparate, with varying degrees of effectiveness across different sectors and industries targeted by scammers. While some sectors, such as telecommunications, have implemented industry codes to combat scams, others lack specific, enforceable anti-scam requirements.
Now, to be fair to AUSTRAC and other regulatory authorities, they are still actively working to combat money laundering and financial crimes. But it’s challenging to prevent every instance, especially when scammers continually adapt their tactics.
Recognising the urgent need for a more comprehensive and coordinated approach, the Australian Government has embarked on a mission to establish a robust regulatory framework to combat scams effectively.
This framework aims to delineate the roles and responsibilities of government bodies, regulators, and the private sector in addressing scams, with a primary focus on banks, telecommunications providers, and digital platforms.
Despite these efforts, it is crucial to recognise current regulations primarily target telecommunications providers, who are governed by the Reducing Scam Calls and Scam Short Messages (SMs) Code.
This industry-developed code, registered and enforced by the ACMA, mandates that telecommunications providers take reasonable steps to prevent and block scam calls and text messages. While this has led to substantial reductions in scam calls and consumer reports, it also highlights the adaptability and sophistication of scammers.
Additionally, regulators such as the ACCC, the Office of the Australian Information Commissioner (OAIC), and ASIC can offer consumer protection, privacy oversight, and financial system regulation.
However, there are currently no specific requirements in place for banks and digital platforms to address scams which is why the framework is being proposed.
In short, there are plenty of gaps in our response to the accelerating pace of innovation and action taken by scammers.
Notably, the Australian Banking Association (ABA) in November launched an industry-led ‘Scam-Safe Accord’ which outlines a series of anti-scam measures to be implemented across the banking sector.
It’s a significant step forward which includes the introduction of a payee confirmation system, enhanced customer protections, intelligence sharing, and efforts to restrict high-risk payment channels.
It’s commendable, but neither the ‘Scam-Safe Accord’ and Scams Code Framework can move forward without the key regulator, AUSTRAC.
AUSTRAC’s involvement in the proposed Scams Code Framework is not a mere option – it’s a necessary call. Their expertise is indispensable in the fight against scams and the preservation of Australia’s financial security.
While Australia sleeps in the sun, those of us with the authority to act – including AUSTRAC and the Federal Government – can’t get comfortable. It’s increasingly urgent that we, as a nation, develop integrated strategies to stop the scammers and the financial channels they exploit to our collective detriment.