Interview with ABC Radio National Breakfast on scam prevention

Sally Sara (Host): Now let’s take a look at the banking sector. So, should social media companies and telcos be responsible for compensating scam victims? They could be under draft laws which were introduced by the federal government at the end of last year, the scheme would allow victims to seek reimbursement, not just from their bank but also from any digital platform, which failed to put adequate scam protections in place. For more on this, I spoke earlier to Anna Bligh, who is the CEO of the Australian Banking Association, and she’s about to appear at a parliamentary committee hearing this morning about these proposed laws, and I asked her whether she will be backing the scheme.

Anna Bligh (Guest):  Well, I’ll certainly be encouraging the committee to recommend the passage of this legislation. There’s some minor amendments that might need to be done, but this is a world first. This is a uniquely Australian solution to giving Australians much better protections from scams. The real power of this legislation is that it’s designed to make sure that big social media giants, telcos and Australian banks are doing everything in their power to stop scams getting to Australians in the first place, and if they do get through, those companies that let them through could be liable for fines, and will have to make some compensation to customers. So, it’s a very important piece of legislation, and I do hope that the parliament in the next two weeks will pass the bill.

Sally Sara: It is the banks, of course, that are holding people’s money, and the banks that ultimately hand the money over to the scammers in these unfortunate situations. Why shouldn’t the buck stop with the banks, as is the case in the UK?

Anna Bligh:  Well, it’s an interesting comparison. People look at the UK and say, why don’t we do that here? What we see in the UK is that per capita scam losses are on the increase, and they’re about double what we see in Australia. We’ve been working here in Australia on an ecosystem approach that is close all the doors, don’t let any scam through. What that has meant in the last couple of years is we’ve seen a 40 per cent reduction in scam losses. Now it’s not much comfort to those people who have still lost money, but that’s a very successful measure of how Australia is approaching this. It is working to make sure that telcos, banks and social media platforms all work together to keep the scams from ever getting on the platforms in the first place, to keep the phone numbers that scammers are using to ring you and introduce you to a scam, and to make sure that banks can close accounts that are scam accounts as quickly as they can.

Sally Sara: But under this proposed model in Australia, a victim would have to go to an ombudsman who’ll decide who’s responsible and for how much, how long would that take?

Anna Bligh: You’re right. We’ve worked very closely with consumer representatives, consumer groups and the government to make sure that victims will not have to go and knock on the door of their bank, then go on to their telco and then go to, you know, meta or somebody else. This will be a one stop shop, a one door in and have one person who’s independent of all of those players, have a look at the circumstances and say, well, in this case, I think it’s this company that really needs to make sure you’re reimbursed.

This is this is a new regime, and I think it will be incumbent on the financial complaints authority to make sure that they can do this and resolve the complaints in a very, very quick way. Not everyone will have to go to that body. Some people will go straight to their bank, and bank will look at it and say, well, in this circumstance, it was a mistake from the bank. You know, if you wake up in the morning and there’s been fraudulent transactions on your account overnight that you had nothing to do with, banks are 100 per cent responsible for that, and they pay you the full amount. It’s where you’ve directed that the bank, you’ve told the bank to move your money somewhere, depending on the circumstances. It may not always be the case that you’ll be eligible if you’ve given your pin way if you’ve been involved.

So that’s what the independent umpire, through the Financial Complaints Authority will look at. ASIC will also have an opportunity under this regime to fine companies if they’ve done persistently done the wrong thing.

Sally Sara: Anna Bligh is the Chief Executive Officer of the Australian Banking Association. What’s your industry’s figures telling you about how big the issue of scams is at the moment and how much bigger it’s expected to become.

Anna Bligh:  What we’ve seen in the last really, since COVID, is that scams have become, globally, much, much, more common. They are now being run by very sophisticated criminal gangs. But as I said, we don’t expect to see an increase in Australia. We are seeing a reduction. We are seeing a very, very important process of cooperation between banks and their telcos, and we’d like to see more from those big social media giants. 50 per cent of all scams come to customers of a social media platform. If we could get those scams taken down off those platforms before they get to customers. You know, enough is enough. We should be able to expect, as Australians, if you profit from the digital economy, then you have an obligation to make sure that people are safe in it, and banks are doing what they can, they’re investing millions of dollars. We just want the social media giants to come and play ball.

Sally Sara:  Rather than a consumer having to go to an ombudsman. Some of the consumer groups are saying that they want to see a modified UK model, where the bank compensates the victim and that happens quickly, and then the liability gets sorted out between the banks and the digital platforms at their end. Would that be a better system?

Anna Bligh: I think on balance, where the government has landed on this is a very appropriate way to make sure that companies are financially incentivised to keep investing in scam protections, whether it’s a bank or a telco or a social media platform. You know, the Australian Financial Complaints Authority is not a new body. This body is already in place. It is already hearing complaints from customers. Let’s not build another regime. Let’s go with the authority that already has the expertise. We can get it up and running this year, and we can start giving better protections to scam victims as quickly as possible.

Sally Sara: Anna Bligh, thank you for your time this morning.

Anna Bligh: Thanks, Sally.

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