In the Chinese community,for instance,scammers are calling people using a caller ID that looks like an official Chinese police number. They send their targets fake documents that look like arrest warrants. The Australian Competition and Consumer Commission,which runs the National Anti-Scam Centre,says the scheme uses mobile calls and video calls from multiple people who pose as police or other authorities. One young man paid $400,000 after being convinced he was about to be arrested.
We all think we won’t fall for a hoax,but nobody is immune. I am not writing this because I have lost money. The point is that too many of us are being stung,whether it’s by a fake text message about a road toll or an elaborate scheme that takes our savings.
So what is being done? That is up to Stephen Jones,the assistant treasurer. He has spent some of the past four months going to 60 community forums to get feedback on a new “scams code” to be set up this year. One positive sign:Jones says he heard audible groans from the audience whenever someone talked about calling their bank to report a scam. He knows how long people wait on hold.
Treasury is drafting a new law to impose mandatory obligations on the industries that make up what the government calls the “ecosystem” for these scams:banks,telcos and social media companies. Jones wants to designate the sectors that must comply with new obligations on how they respond to fraud. That will include how long they take to act when a customer reports a scam.
The social media companies will be part of the new code because they often spread the deceptions in their promoted content. Just as a news masthead could be held to account for advertising a fraud,so should Facebook and its owner,Meta. “It’s not like Meta is a struggling start-up,” says Jones.
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Banks will have to pay a penalty if they do not meet the new obligations. So will others. The ACCC will enforce the fines on those who do not comply with the code. Jones does not expect this to eradicate scams – because new ones are launched as soon as old ones are shut down – but he wants the code to impose a higher cost on crime.
“Our objective is to make Australia the hardest place in the world for them to do business,” he says. What he will not do,however,is ask the banks to reimburse every victim who loses money.
This is a sticking point because consumer groups want the government to force banks to compensate customers who lose money through no fault of their own,along the lines of planned laws in the United Kingdom. This mastheadreported on this call last week. There will be a heated debate about whether Labor comes up with a strong regime that really works.
Jones argues that banks should not have to pay if the social media company is at fault,or some other company deserves primary responsibility for the scam. This is a fair point. In the end,however,industries will have to pay a price if their collective complacency allows fraud to thrive. Without that pressure,the incentives to stamp it out are too weak.
The ACCC says there were 301,000 reported scams last year,up 26 per cent on the year before,but nobody knows the real cost because many Australians will never own up to being conned. What we do know,however,is that the scam economy is huge and growing. And it is about time it had a recession.
David Crowe is chief political correspondent forThe Sydney Morning Herald andThe Age.
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