September 11, 2024:
I'd also like to thank the member for Warringah for introducing this topic for debate because it truly is a matter of public importance. Scams are truly heinous crimes that cost our community in so many ways. They eat away at our trust in institutions and can not only lead to financial devastation but also seriously harm the mental health of victims. I think every member in this chamber would have experienced the anguish of a relative or friend who has been a victim of a scam. Only just a couple of weeks ago, I received communication from a very distressed friend whose aunt, a single woman on the pension with stage 4 cancer, was scammed out of her entire life savings. The bank did not respond, of course, until that story reached the media. It is a roller-coaster of emotions, not just for the victim but for their family—shock and shame and then perhaps disgust that fellow humans could do such a cruel thing, particularly if the victim is older or vulnerable. Then it is followed by fear: How much has been lost? Does the scammer still have control of my identity? How can I be safe again? Then comes the frustration of trying to get redress. The path to recovery is long and difficult. Consumers report difficulties even contacting their bank to report the scam and significant waits for the bank's fraud investigation outcome.
Currently, according to the Community Action Law Centre, Australia is being heavily targeted by scammers as we have seen as easy prey, as we just don't have sufficient measures in place to protect our citizens. The CEO of the Consumer Action Law Centre, Stephanie Tonkin, also said: Australia's banks are failing, first for allowing scams to take place, and then failing their customers who seek financial redress causing them to turn to AFCA for help.
Currently, Australia's major banks only reimburse between two to five per cent of their customers' scam losses. The federal government has promised to implement tough industry scam codes for the past 18 months. Scams cost Australians a total of $2.7 billion in 2023. That is why I am pleased to hear this week that the Assistant Treasurer will soon bring forward a second tranche of legislation to address the rapid rise of scams in this country, including mandatory codes of conduct for telcos, banks and social media platforms and that there will be significant fines of up to $50 million for these groups if they fail to act on fraudulent schemes that fleece their customers. That is a good start; however, I'm still concerned that the proposals will not go far enough in addressing liability for scam losses.
Any solution to tackle the scourge of scams must be consumer-centric. It must ensure that it works in their interests and does not unfairly burden them with the cost of scams. Liability for reimbursement must rest with industry. Australians shouldn't be wearing the losses. It is the banks and the financial institutions that have the tools to protect the Australians from the scams. For example, some major banks have introduced functionality which checks the account details against the name before a transfer is executed. This should be compulsory for all financial institutions.
The best way to prevent and disrupt scams is through incentivising real investment in prevention systems and through ensuring consumers can access redress where industry has failed to protect them. Second, consumers need a simplified single pathway for redress through their bank or their financial institution where their money was stolen from. It should not be left to the consumer to navigate the bank's internal systems and sometimes multiple banks to try and retrieve their hard-earned money. Where this pathway fails there needs to be a single door for consumers to access external dispute resolution.
It is also important that we have strong codes that apply to telcos and social media platforms so that they rise to meet their responsibilities. Scammers use their services and platforms to commit their crimes. It is intolerable that, within an hour of placing an ad on Facebook Marketplace or a car site, a person is bombarded with scammers trying to trick them into transferring money. (Time expired)
The DEPUTY SPEAKER: The discussion has now concluded.