In an era where digital transactions are as common as a morning cuppa, the threat of financial scams looms large over Australians, particularly those who may not be as tech-savvy as younger generations. The Albanese government, recognising the urgency of the situation, has put forth the Scams Prevention Framework (SPF) in an effort to shield citizens from the growing menace of financial crime. However, the SPF has been met with a wave of criticism for its perceived inadequacies, particularly when it comes to compensating victims of scams.
The SPF, while ambitious in its scope, stops short of mandating automatic compensation for scam victims from banks, telcos, and social media platforms. This omission has drawn the ire of consumer groups and independent senators alike, who argue that the framework should include provisions similar to the UK’s model, which enforces a five-day mandatory reimbursement requirement for banks, covering losses up to £85,000 (approximately $170,100 AUD), except in cases where the victim is grossly negligent.
As the clock ticks down on the current term of government, with politicians gearing up for the expected final two weeks of parliament before the election, the pressure is on for Labor to pass the legislation. Despite the Labor-dominated committee’s recommendation to pass the SPF Bill, independent senator David Pocock has voiced concerns over the lack of certainty for dispute resolution pathways, highlighting that scam complaints could take up to two years to resolve under the current proposal—a timeframe that is untenable for victims who have suffered significant financial losses.
Senator Pocock’s critique extends to what he deems the ‘biggest shortfall’ of the SPF: its approach to compensation. He advocates for amendments that would presume compensation from entities that fail to meet their obligations, with the most at-fault entity footing the bill to expedite payment to the victim. This presumption would stand unless the victim exhibited gross negligence.
On the other side of the political aisle, Coalition senators Andrew Bragg and Dean Smith have accused the government of procrastination and vagueness, arguing that the SPF’s finer details have been left to future industry codes and rules, which parliament and stakeholders are expected to accept on faith.
Despite these criticisms, proponents of the SPF argue that it represents a significant step forward, promising economy-wide reform to replace the current ‘piecemeal and inconsistent’ scam protections. The framework proposes hefty fines of up to $50 million for non-compliance, enforced through mandatory industry codes. Additionally, if passed, the Bill would empower regulators to enforce the SPF and provide funding to the Australian Financial Complaints Authority (AFCA) to establish external dispute resolution rules to support victims.
The urgency of these reforms cannot be overstated. In 2023 alone, Australians lost a staggering $2.74 billion to scams, with investment scams accounting for nearly half of that figure ($1.3 billion). The SPF represents a beacon of hope for better protection against such crimes, but as it stands, many feel it falls short of providing the immediate and tangible support scam victims desperately need.
What are your thoughts on the proposed Scams Prevention Framework? Do you feel it does enough to protect and compensate victims? Share your experiences and opinions in the comments below, and let’s discuss how we can work together to advocate for stronger protections for all Australians.
Also read: $10,000 stolen by scammers, but bank’s response leaves victim furious
