Fintech Australia, the industry group representing Australia’s startup sector, has expressed its support for the government’s initiative to introduce scam obligations for financial services companies.
The proposed Scams Prevention Network (SPN) aims to implement a comprehensive approach to combat online financial scams. This will involve increasing obligations for banks, telecommunications companies, and social media platforms to reimburse customers and take proactive measures against scams.
In 2023, Australian consumers reported losses totaling A$2.74 billion due to scams. Assistant Treasurer Stephen Jones emphasized that these new mandatory codes are designed to make Australia “the toughest target in the world for scammers.” He noted that social media platforms will have new responsibilities under the codes of practice, including verifying the identities of advertisers to prevent criminals from easily disseminating fraudulent investment materials.
The bill is scheduled to be presented to parliament in November. However, Fintech Australia has issued additional recommendations, suggesting that the government’s SPN alone will not be sufficient to tackle the escalating issue of scams.
Their proposals include utilizing regulatory sandboxes to assess the impact of the SPN on specific sectors, ensuring that obligations are practical and proportionate to consumer risks, refining the definition of “scams,” and clarifying how the anti-scam measures relate to other existing laws, such as anti-money laundering and privacy regulations.