Introduced by the Australian government in September, the Scam Prevention Framework (SPF) is the latest policy aimed at protecting scam victims. The framework places significant responsibility on the technology, banking, and telecommunications sectors to develop effective solutions.
Non-compliance could result in hefty penalties, including fines of up to AU$50 million. Additionally, companies that fail to comply may be required to compensate scam victims.
The codes will be mandatory and are expected to be introduced in late 2024.. Australians lost $2.74 billion to scams last year — and that figure is likely underestimated, as many victims do not report their losses. This has become a significant issue affecting society as a whole.
SEE: How Organizations Can Prevent Their Employees Falling for Cyber Scams
How will the Scam Prevention Framework work?
Australia won’t be the first to introduce laws to protect victims from scams.
In 2023, the U.K. passed legislation making the banking industry liable for losses from scams. These laws, which took effect on Oct. 7, 2024, have not yet been fully tested for their impact. However, they allow scammed individuals to claim up to £415,000 in lost money, with few exceptions.
What sets the Australian laws apart is that they also cover tech platforms like Google and Facebook, which frequently host scam ads and allow scammers to operate. Additionally, telecommunications companies are included, as they facilitate the data flow and communication between scammers and their victims.
The key components of the SPF
The SPF laws have been drafted up with five key objectives in mind:
Consumer Protection:
- Financial institutions and telecom operators play a key role in detecting and blocking scam activity before it reaches consumers.
- This also includes public awareness campaigns that educate consumers about the risks of scams and how to protect themselves.
Detection and Reporting:
- The framework supports the development of advanced tools and technologies that help in identifying scams in real time.
- A standardised reporting mechanism is established to ensure that scam incidents are consistently tracked and shared with relevant authorities and industry players.
Industry Collaboration:
- SPF promotes collaboration between financial institutions, telecom companies, and digital platforms to share information about scam trends and emerging threats.
- By creating a unified front, businesses and government can work together to reduce the success rate of scams and limit financial losses.
Government and Law Enforcement:
- Law enforcement agencies are given enhanced powers and resources to investigate and prosecute scammers, particularly those operating internationally.
- The government is also actively involved in policy development and coordination with international bodies to address scams that cross national borders.
Technological Solutions:
- Investments in AI, machine learning, and data analytics help to proactively detect scam patterns and stop them before they impact consumers.
- The SPF encourages innovation and the adoption of cutting-edge tools that can filter scam communications and transactions.
Not everyone is happy with the SPF
The Communications Alliance has raised concerns with the SPF, suggesting that there is a “quadruple jeopardy” liability within the draft legislation.
Luke Coleman, CEO of the Communications Alliance, highlighted that there were already three other government-controlled avenues available to people that telecommunications are liable to make reparations from scams: the Australian Communications and Media Authority, Australian Competition and Consumer Commission, and External Dispute Resolution Scheme. There is also the potential for civil action, including class action.
In a submission to the government in response to the proposed laws, the Communications Alliance made three “key” recommendations for refinement:
Move specific details into sector codes: They recommend shifting detailed provisions from the primary legislation t