Parliamentary Updates

6 February 2025

As many have discussed in relation to this legislation, there is a David and Goliath battle when it comes to victims and banks, financial institutions and the large telcos and social media platforms, which are all too often part of scams reaching consumers. Under the current proposed legislation, to bring forward a claim for compensation, a victim will need to gather information from companies—the banks and the telcos—to establish whether or not the companies have complied with the code. That is simply not realistic. I've raised this with the minister. Understanding that David and Goliath battle is important. The information is not readily available, and there is no requirement for the companies to hand it over willingly. I think it's fair to assume that getting to that information, with the scale of these organisations, would just be impossible for the victims of scams. It's a David and Goliath battle.

My amendment goes some way to bringing power back to consumers, by at least reversing the onus of proof when it comes to accessing dispute resolution, that it requires the companies and the banks, financial institutions and telcos involved in a scam, as a party to the scam, to provide the victims with a statement of compliance with the Scam Protection Framework to then access that internal dispute resolution. Associated with that needs to be what that Scam Protection Framework ultimately looks like, I appreciate, and I have some questions in that respect.

What this means is that it's not just for the victim to have to establish the case from scratch, that they are entitled to dispute resolution and, thus, compensation. There is a reversal of onus, which is important. It strengthens the integrity of the framework and will ensure that vulnerable customers will be able to have a better chance of access at dispute resolution and, ultimately, compensation from the regulated entities.

This amendment improves the internal dispute resolution process to require businesses to provide this statement of certification, that they have complied with their obligation of the bill, and there will be a civil penalty provision that carries with this, and these certificates will be admissible in later proceedings. I ask the minister to make sure, though, that the explanatory memorandum includes details relating to the specificity requirements that will be placed in the rules, to ensure customers have enough details to satisfy their compliance with their obligations. It might be by providing details that at a specific time the customer confirmed the name of the account to receive the funds through a confirmation of a payee mechanism. Another example might be a social media platform providing specific details of when they became aware of the scam activity and what steps they took to respond. It's important that everyone involved in this matrix takes some responsibility.

We've had discussions around whether it should be, for example, an automatic presumption of compensation against the financial institutions. I accept that there are often three elements to scams. We have the victim, who has unwittingly consented to authorising a payment. We have financial institutions that have access to who that payment is ultimately going to, so they bear a responsibility in introducing friction and in ensuring people are generally aware of what they are authorising. Then we have the telcos. I accept this. The telcos are a major player, especially when I look at social media and Facebook and Meta entities, in assisting in delivering scams to the victims. They are facilitating that, so they also bear that responsibility. But, of course, getting behind the wall of information in those kinds of organisations is simply impossible for victims.

I do thank the government, I understand, for accepting that this reversal of onus is necessary, when it comes to that compilation of information and that certificate of compliance so that access to dispute resolution can operate. I think it's important, though, for the government to continue being vigilant, to make sure fair compensation is occurring. I urge all consumers and victims out there to absolutely report scams. They profit and thrive with the secrecy, with the shame or anxiety about reporting. So reporting and exposing scams is the most important thing that people can do.