With digital fraud schemes and scams continuing to burden consumers, long-awaited reforms seeking to prevent and remove scams may soon be realised: read the below article extracted from The Australian Financial Review, Tom Burton 19 January 2023.
A doubling in scams each year has prompted ACCC chairwoman Gina Cass-Gottlieb to call for urgent regulations to force digital platforms to proactively take down fraudsters’ sites and verify advertisers.
There has been an explosion in digital fraud, estimated to cost consumers as much as $4 billion a year, as scammers move away from telephone-based scams and try to exploit the rollout of instant payment systems.
After extensive research and consultation, the Australian Competition and Consumer Commission in November recommended a historic suite of reforms that would help consumers report scams and put digital platforms on notice to take down scams before they proliferate.
Also on the table are new codes to target competition abuses, such as the tech giants preferencing their own services and impediments to consumers switching digital services.
Treasury is completing a rapid final round of consultation with the aim of having the reforms considered by the government before the May budget. Also being prepared for early cabinet deliberation are landmark changes to privacy and data security laws and a new digital identity regime to stop the rampant theft of identity and credentials.
The long-awaited identity system has been elevated to one of eight key priorities being tracked by national cabinet.
“The reason we said there should be legislative safety net safeguards is that that reform is urgent,” Ms Cass-Gottlieb said in an interview.
“We are seeing the number of scams and level of losses – and this is reported losses only, which underestimates it – doubling every year.”
“Significant action has been taken in terms of [scam] phone calls. And we are now seeing SMS scammers move to the less regulated and less protected channels of communication to [target] potential victims. And the one where we’re seeing huge increase is in the digital platform services.”
Ms Cass-Gottlieb said the ACCC wanted digital platforms including Google, YouTube, Facebook, Twitter, Instagram and TikTok to be proactive in trying to remove scammers.
“That is our intent. The telecommunications sector has made significant strides, with scam calls reduced by half, and that is proactive.”
“The [digital] platforms seemingly have huge capacity for sophisticated data analysis.”
Businesses, consumers urged to speak up
Ms Cass-Gottlieb is urging businesses and consumers to make their views known before the February 15 deadline for submissions to Treasury’s final consultation.
“We know there will be a lot of advocacy from large global businesses who would prefer to be able to voluntarily determine what they want, and this is an opportunity for Australians to be heard.”
Digital platforms would not make changes unless forced to, she said.
“It would be wrong to think that this is something we can leave for overseas jurisdictions to do.”
“The ACCC’s observation is that the global businesses will make changes in the jurisdictions that act to give extra protection to their consumers and businesses, but will not voluntarily extend that in the jurisdictions that don’t.”
Critical year for digital competition
The ACCC has been at the forefront of developing regulation for the digital economy and Ms Cass-Gottlieb said Australia risked losing the consumer and competition benefits that leading jurisdictions in Britain and Europe were now targeting.
“This is a really critical year,” Ms Cass-Gottlieb said.
“Governments around the world are commencing to actually implement the reforms they’ve made.”
“The UK in February is likely to look at introducing their legislation for protections for their antitrust regulator, [the Competition and Markets Authority], to move ahead to work on very specific industry codes. They’ve got a highly developed package and big team already working on it – 70 people.”
“We have lead jurisdictions making steps to actually implement [reforms]. Australia has the opportunity to continue to be in the lead – as it has been in consideration in a detailed and practical way in its work for five years – about what fit-for-purpose regulatory protections are needed for Australian consumers and businesses.”