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As online scams become more sophisticated and frequent, a new body will be established to prevent consumers from falling victim to criminals. Paul Budde reports.

THE AUSTRALIAN Competition and Consumer Commission (ACCC) will use seed funding from the Budget to collaborate with other agencies to prepare for the establishment of a National Anti-Scam Centre (NASC) in July, with the aim of preventing and mitigating the rising number of scams affecting Australians.

The centre will use cutting-edge technology to share intelligence and distribute information to banks, law enforcement and vulnerable communities. The Federal Government has allocated $86 million to this national effort, including $58 million to create the centre.

The centre will facilitate faster responses to scam reports and establish a “hit squad” of experts from industry and law enforcement to act on scam trends. It will also introduce a “whitelist” of approved phone numbers, with SMS messages being blocked unless they are from an authorised agency.

Scams are becoming increasingly prevalent in many countries and Australia is no exception. Scammers use a variety of tactics to deceive people, including phone calls, emails, social media messages and fake websites. They often pretend to be someone else, such as a government official, a bank employee or a charity worker to gain the victim’s trust.

Once scammers have gained a victim’s trust, they may try to extract money or personal information from them. This can take many forms, such as asking for a payment to be made to resolve a supposed debt, offering an investment opportunity that sounds too good to be true or requesting access to a victim’s computer to fix a non-existent problem.

To combat these scams, many countries have established anti-scam initiatives. These initiatives typically involve a combination of awareness-raising campaigns, law enforcement efforts and support for victims. The new NASC in Australia is one such initiative, designed to provide a centralised hub for information-sharing and response to scam reports.

Awareness-raising campaigns aim to educate people about the common tactics used by scammers, as well as warning signs to look out for. They also provide advice on how to protect oneself from scams, such as not responding to unsolicited messages, not sharing personal information with strangers and being wary of offers that seem too good to be true.

Law enforcement efforts involve investigating and prosecuting scammers, often in partnership with international law enforcement agencies. This can be challenging, as scammers often operate from overseas and use complex networks to evade detection. However, some success has been achieved in this area with some high-profile scam rings being shut down in recent years.

Support for victims is also an important part of anti-scam initiatives. Victims of scams can experience financial, emotional and psychological harm, and may need assistance to recover from their experiences. This can include financial support, counselling services and legal advice.

Last month, in their Targeting Scams report, the ACCC reported that Australians lost more than $3.1 billion to scams in 2022, an 80% increase from the previous year. The ACCC estimates that at least 30% of victims do not report scams, so the true losses are likely to be far higher. The top five types of scams reported in 2022 were investment scams, remote access scams, payment redirection scams, romance scams and phishing.

Assistant Treasurer Stephen Jones said that bank customers were overwhelmingly the main target for scammers and that banks would need to lift the bar on their scam prevention efforts. The big four banks – Westpac, NAB, Commonwealth and ANZ – were recently the subject of a highly critical report from the corporate watchdog, the Australian Securities and Investments Commission (ASIC), which revealed that about 31,700 customers at these banks collectively lost more than $558 million to scams in the 2021-22 financial year.

The report also showed that the banks only paid about $21 million in compensation to the victims and the rate of reimbursement was between 2% and 5%. Consumer groups are pushing for banks to reimburse scam victims except in cases of extreme negligence, something that the Minister is not enthusiastic about and the industry has pushed back against. The Minister said that codes of practice would be developed for banks, social media, telcos and other industry players this year.

Consumer groups welcomed the new anti-scam centre but said that it would not do much to help people who have already lost money to scams. They are calling for new laws that mandate industry action on scam prevention and impose liability for losses when they fail.

The NASC will enable real-time information sharing on scams between law enforcement, government agencies, banks, telcos and digital platforms.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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