In September, the Australian government proposed the introduction of a ‘Scams Prevention Framework’ (SPF), which would implement new scam obligations across all sectors.
In response to the consultation period for this proposal, FinTech Australia, the industry body which represents over 420 fintech companies and startups across Australia, is supporting the need to take preventative action to address the growing impact of scams on the Australian community and economy.
FinTech Australia explained that it is backing the SPF’s policy aims of introducing a whole-of-ecosystem approach to protect consumers, prevent harm and restore trust in digital services.
The Australian government proposes, beginning with banking, telecommunication providers and digital platform services, it will implement new mandatory and comprehensive scam obligations. The Bill, which would insert the SPF into the Competition and Consumer Act 2010, is expected to be introduced to the federal parliament in November.
However, in a submission filed to parliament on Friday, the industry body explained that the proposed SPF cannot achieve these aims alone. In recognition of this, it recommends that the framework be supported by a “holistic package of reforms”, which would strengthen the National Anti-Scam Centre, target enforcement activity against scammers, enhance consumer awareness, and encourage voluntary information sharing both across and within sectors.
FinTech Australia’s recommendations
To help ensure the effectiveness of the SPF in protecting consumers while minimising unintended negative consequences, FinTech Australia submitted a number of considerations it believes are important. These include:
- Ensuring the SPF accounts for scalable, evidence-based approaches to addressing scams, including the use of regulatory sandboxes to test the impact and effectiveness of the proposed SPF on specific sectors and the overarching aim of consumer protection
- Ensuring obligations on regulated entities are practical, proportionate to the consumer risk, and do not hamper competition
- Implementing guardrails to ensure a consistent approach to interpretation and enforcement of the SPF across sectors, led by regulators
- Introducing a more precise definition of ‘scams’, providing further clarity regarding the extraterritorial application of the SPF and improvements to the practical application of the safe harbour;
- Improving clarity on how the anti-scam obligations interact with other laws, such as AML anti-tipping off rules, privacy laws, consumer guarantees and unfair contract terms.
