Introduction
I would like to acknowledge the Ngunnawal and Ngambri people as the traditional Custodians of the land on which we gather today.
I pay my respects to their Elders past and present, and I acknowledge any First Nations Australians in attendance.
To you, Maurice, and the team thank you for the opportunity to share some remarks.
Thank you to Westpac for their ongoing support of the Press Club so that we can have these important conversations.
Over the last 2 years, I have spoken to thousands of Australians in community halls across the country.
People from all walks of life.
I asked them to share their stories. Their fears. And hopes.
In every room, there have been accounts of people who have lost money to the scourge of scams.
Sometimes hundreds of dollars, sometimes thousands.
Tragically, sometimes their entire life savings.
Sarah from Perth lost $15,000 to a ‘Hey Mum’ scam.
Peter up in Ipswich was conned out of $130,000 when he thought he was investing in a safe term deposit through a broker.
Robert from Albury thought he had found love again after the passing of his partner. He sent $73,000 overseas hoping to bring her to Australia.
These are just a few of the 601,000 Australians who reported $2.74 billion in losses to scams in 2023.
One experience that stuck with me illustrates why we are here and what we are fighting.
Hannah – a financial counsellor in her 30s – went to sell her chest of drawers on Facebook Marketplace.
Hannah was busy at work and keen to see the drawers sold quickly.
She received a message from a Paul who wanted to buy them.
Hannah looked up Paul’s profile page and nothing seemed out of the ordinary.
Paul asked to use a courier service to pick it up.
Oddly, Paul was insistent that he needed to pay Hannah through the courier’s website.
Hannah wasn’t comfortable with this and would have preferred to use PayPal, but she eventually agreed.
Hannah jumped on the courier website and started filling out the form.
When the website asked her to input her bank details, a popup on her browser warned her that this was unsecure.
It was only then that Hannah realised she was being scammed.
She was horrified, confused and embarrassed at how far she had been strung along.
And how close she was to allowing a scammer into her bank account.
Hannah knew about the risk of scams.
She thought she had been very cautious and had gone out of her way to check who Paul was.
And yet, she had still been manipulated.
If not for that popup, she would have been yet another victim.
The risks and benefits of the evolving digital economy
The data – and the stories behind them – demonstrate how quickly scams have evolved and how they have industrialised, enabled by technology.
The digitisation of the economy experienced in just a few decades has fundamentally changed our world.
It has changed the way we communicate, how we buy and sell goods and access services.
We can expect the pace of change to accelerate.
The profound impact of this change has a direct bearing on the expectations of government and business.
The first responsibility of government is to keep its people secure.
The responsibility of business is to abide by the laws of the countries in which they operate.
Globalisation and its impact on society, culture, and the economy challenges the way nation‑states and multinational businesses acquit these responsibilities.
But it does not displace them.
Time and distance have become compressed.
Information is transmitted around the world through digital platforms in an instant.
Goods are purchased online in a global marketplace –
Before being delivered rapidly to your door to even the smallest regional towns.
Retail transactions and finance are now overwhelmingly digital.
All of this is facilitated by enormous amounts of personal data being stored and shared throughout the economy.
The pandemic only accelerated this trend.
These economic and social shifts are often described in dystopian terms.
I reject that view.
This is not a clock that we want to wind back.
The cost to business and society would not be tolerated.
But the risks and threats cannot be ignored.
The same platform that makes it quick and convenient to buy something, say, on Amazon –
Or make an instant mobile banking payment –
Are the forces that can lead an individual to lose everything at the same speed.
And if consumers lose trust in the rails of modern commerce they will stop using them.
There is already evidence of this.
Consumers aren’t answering calls from call centres because it might be from a scammer.
The genuine message from a business about the arrival of a package, an overdue bill, or the change in a service is lost among the millions of SMS scams that are flooding our phones.
The message is clear.
To lock in the benefits of a digital economy we have to address the harms and ensure that Australians feel safe and secure.
That government and business can keep Australians’ information and money safe.
Without security, consumers will lose the confidence to participate in a digital economy.
That is a cost borne by all.
The state of play on arriving to government
Sadly, this was the state of affairs left to us by our predecessors.
They failed to recognise that consumer safety is core economic policy in a digital world.
They saw the role of government was to whisper the words.
‘Please be careful’.
And if you fall for it, you’re being a mug who just didn’t listen.
This all came to a head in the pandemic.
Australians were sitting ducks.
Scams exploded.
Losses in 2021 were double the losses in 2020.
Losses in 2022 were double the losses in 2021.
Doubling and doubling again.
In their final year in office, scam losses had reached $3 billion and set to reach $6 billion.
This was not just bad luck.
It was the product of a government that was asleep at the wheel.
And consumers paid the price.
A new approach for consumers
We see this differently.
We understand the problem and we are acting across government to fix it.
The Albanese Government is committed to helping Australians earn more and keep more of what they earn.
And we are delivering.
Wages are up.
Taxes are down.
The budget is in surplus.
We are implementing a coordinated, whole‑of‑government effort to keep Australians safe in the digital economy.
There are a number of threats.
And each vulnerability requires a targeted response.
There is a difference between cybercrime and scams.
Can I use a consumer‑centred analogy to explain this and why we need a program which tackles cybersecurity and a program to deal with scams.
Let’s start with cybercrime –
This is equivalent to a criminal who is attempting to break into your house.
It’s your money or your information that they’re after.
The obvious response is to install stronger and better locks on the doors and windows, and to rethink the way we store our valuables.
As a government, we are doing this.
The Attorney‑General Mark Dreyfus is leading one stream of work with our response to the review of the Privacy Act.
We’re asking what information is being kept by business, for what purpose, for how long, and demanding it is held securely.
We’re imposing higher standards on business to ensure they are keeping customers’ information safe.
We’ve increased penalties for failing to do so.
This will ensure the Privacy Act is fit‑for‑purpose in the digital age.
Verifying identity is foundational for engaging in the digital economy.
Often data is being held because it is a requirement of law to verify your identity.
It has traditionally involved businesses requesting and keeping copies of sensitive documents –
Your passport. Your birth certificate. Your licence. Your Medicare card.
It’s cumbersome.
It is also risky for you to share, and for institutions to store.
So the Finance Minister Katy Gallagher has been leading our work to strengthen and expand the Digital ID system.
So that individuals can verify their identity more easily and securely.
The unique challenges of scams
All of these measures are important to keeping Australians’ information safe.
It builds a stronger, more secure home.
But this doesn’t work if you open the door and let the criminals in.
And that in a nutshell is what scammers do.
They convince you to let them in.
This is why we need a strategy to deal with cyber‑security in addition to a strategy to deal with scammers.
It is a complex challenge.
But it is vital that we ensure Australians are safe and secure.
Because every dollar lost has a story.
A story of financial pressure.
A story of emotional stress, embarrassment and injustice.
In many instances, the emotional toll is even worse.
The ache of despair over having lost so much.
The worry over how to make ends meet.
And the anger of having their trust and humanity violated.
So many scams prey upon our natural instincts.
Such as the desire to love and be loved.
And Australians have lost $5.7 million lost to dating and romance scams alone in the first quarter of this year.
Understanding scams in their proper context
The stories sadden and anger me.
That people could be taken advantage of in a moment of vulnerability.
I’m sure all of you feel the same.
But Australians want their government to turn anger into action.
And to do that, it is necessary to understand what we are trying to stop.
There has been an evolution in the threat of scams.
Both scams and the scammers have changed.
Some people still think of scammers as conmen peddling easy‑to‑spot schemes.
In this framing, it is convenient to blame the victims for falling for ‘obvious’ scams.
Particularly when the scam looks like a get‑rich‑quick scheme.
The cliché online scam which plays to this trope is the Nigerian Prince scam.
We call them ‘advance‑fee’ scams. They have many variants.
They follow the same pattern.
A victim is enticed into paying an advance fee on the promise of receiving something of greater value in the future.
The eponymous scam would project legitimacy by claiming to be sent on behalf of the Nigerian royal family.
The implausible claims –
The inevitable spelling mistakes –
It is all part of the ploy.
This scam is designed to target the most vulnerable.
People who could be blamed for having been gullible.
People who would be so embarrassed that they wouldn’t come forward.
It was convenient for governments and institutions to hide behind this description of a scammer and their victim.
This is both a simplistic and outdated view.
A common response
It’s regularly put to me that the answer to the problem is better education and awareness.
It is true.
This is part of what is needed.
Consumers do need more tools to arm themselves against the common attacks of the criminals attempting to steal their money.
Some good rules of thumb that should become as second nature as wearing a seatbelt are –
- Don’t let someone remote access into your computer.
- Don’t give out personal information to an unsolicited caller.
- And don’t press those bloody blue links in an SMS or email.
But we cannot simply shift the responsibility on to consumers.
That’s what the last government did.
Law enforcement and policing
It’s also suggested that the answer is beefing up our law enforcement –
More police out there arresting the bad guys.
And it is true that law enforcement is part of the solution.
But it has its limitations – particularly when we know that the majority of these criminals are operating offshore.
Often in places where traditional law enforcement can’t reach.
An international problem requires a coordinated international response.
Earlier this year, I attended the first international summit convened in the UK.
Signatories to the communique from that summit committed to working together to improve our cooperative efforts –
Including in the areas of intelligence sharing and money recovery.
I have followed this up in our region – including in a recent visit to Singapore with our colleagues from New Zealand and from the banks.
We exchanged information and ideas on regulatory and law enforcement responses to the challenge.
These are all important initiatives.
But today I want to focus on what we must be doing at home. A focus on prevention.
The first phase of the government response
Our in‑country response takes an ecosystem approach.
This means having a deep understanding of the techniques used by scammers and the ecosystem they operate in.
Overwhelmingly the scammers contact their victims through the telecommunications network and via social media platforms.
We understand that the target is the victim’s money – their bank account.
So the fight back against the scammers must strengthen the protections inside that ecosystem.
Telcos and social media need to cut off the means of communication and publication.
Banks and financial institutions need to strengthen protections.
Critically we all need to act with the same speed as the scammers.
This requires a significant uplift in the way we share information between the key institutions within the ecosystem.
We prioritised this as an election commitment.
And we are delivering.
In the 2023 Budget, the government invested $86.5 million in our anti‑scams agenda.
The centrepiece of this investment was $58 million to establish the new National Anti‑Scam Centre.
This is a world‑leading piece of consumer protection infrastructure.
It gives consumers better information to protect themselves.
Better reporting of scams for earlier intervention.
Real time sharing of intelligence with banks, telcos, social media, and regulators.
And better support for victims and targets of scams.
It brings together the expertise and capability of government agencies, law enforcement and the private sector.
This gives us the best chance to detect and disrupt scams.
Ideally before they even reach the consumer.
We know it can work.
Let me share with you Matt’s story.
Matt was researching the idea of investing $150,000 of savings in a safe term deposit.
He received a call from a scammer claiming to work for a well‑known bank who helpfully had all the answers Matt needed.
Before he transferred any money, he had a quick question and so he called the number the scammer provided.
The number had been flagged by Scamwatch.
The National Anti‑Scam Centre was able to alert Optus – Matt’s phone company – and alerted other providers to block the number.
When Matt tried to call, a warning played that the number was part of a scam.
Matt called the bank directly and was shocked to learn the business he thought he was dealing with had no record of him.
This is what a successful counter‑scams approach looks like.
Matt’s money was safe.
And it’s proof that our approach works.
The Centre also establishes taskforces – known as ‘fusion cells’ – to target particular scams.
The first fusion cell attacked investment scams which are responsible for around half of all scam losses.
The next fusion cell will counter jobs and employment scams.
These scams – frequently posted on Meta platforms – use the allure of a job which does not exist to scam a victim.
A common example is a victim receives a WhatsApp message from a ‘recruiter’ with a ‘job opportunity’.
The victim is given directions to register on a website and then begins to complete tasks to earn a ‘commission’.
They might even be added to a WhatsApp group chat with people alleging to be fellow employees.
Initially, they will be able to see their account growing with commissions.
Before it starts to fall into a negative balance.
The victim is then instructed to transfer money to top‑up the funds.
Usually on the promise that they will get the transferred amount back with their commissions, if they complete more tasks.
In 2023, victims lost $24.4 million to these scams – an increase from around $10 million in 2022.
Despicable.
It’s why it will be a focus of prevention and disruption action.
Another key part of the ecosystem is the telecommunications network.
Over half of reported scams originate from a phone call or a text message.
Blocking more of this content is a key part of our strategy.
Scammers send millions of scam messages to Australians, often pretending to be a bank, a telco or a government agency.
So we have also invested in an SMS ID register as part of our first phase.
Communications Minister Michelle Rowland leads this work to prevent scammers imitating trusted brands in text messages.
In our first phase we have established a blacklist of phone numbers being used by scammers to contact their victims.
They are being blocked.
And already over 92.3 million scam calls and over 90.2 million scam texts have been blocked in the first quarter of this year alone.
That’s an average of 1 million scam calls and 1 million texts per day.
But as soon as we block them, a new number is used.
So the next step is establishing an SMS ID register so that if a scammer tries to impersonate a bank, or telco, or government agency –
The message will be blocked if their number is not on the register.
Phase one also involves funding ASIC with a new capability to take down scam websites.
This has already taken down over 5,000 investment scam websites through the last year, saving Australians millions of dollars.
These government‑led initiatives have also been bolstered by steps taken by business.
Banks have established measures which have lead to a meaningful uplift in consumer protection –
Confirmation of payee is to be rolled out across all banks which will make a big difference.
Slowing down or blocking transfers to high‑risk cryptocurrency exchanges has also made a significant contribution to stemming losses.
All very welcome.
More to be done.
The results so far
It is too early to claim victory.
However, the initial results show the tide is turning in the favour of Australians.
Because of the first phase of our plan, annual scam losses declined in 2023 for the first time since 2016.
Now there was still $2.74 billion lost.
A huge amount.
But this represents a 13 per cent drop on 2022.
In fact, losses fell by 21 per cent in the 6 months after establishing the National Anti‑Scam Centre.
As a result of our first fusion cell, investment scam losses decreased by 29 per cent in the second half of 2023.
This proves that our plan is working.
And this is good news for Australians.
Where are the gaps
However, while scam losses are down across most contact modes, this is not the case for social media.
Scam losses originating on social media were up 17 per cent in 2023.
Scam reports were up 31 per cent.
And the social media companies are dragging their heels.
Which is a huge problem because scammers will identify and target the weakest point in the ecosystem.
It is a big problem that digital platforms let scammers use their network to target victims.
It is offensive that they make money from scam ads on their platforms while victims lose.
Digital platforms have a moral obligation to join the fight as part of their social licence.
These are corporations worth trillions of dollars that can afford to invest in a significant uplift to keep consumers safe.
It’s time for them to get on board and protect Australians.
The second phase of the government response
There is more to come.
This year, the government is investing over $67 million in the war on scams.
The centrepiece is legislating a Scams Code Framework and new mandatory industry codes.
We’ll start with the 3 key sectors in the ecosystem.
The codes will apply tough obligations on the banks, telcos, and digital platforms.
It won’t be the bare minimum.
Each sector will be required to address the vulnerabilities in the ecosystem they are responsible for.
We will require the banks to strengthen controls around bank transfers.
This will attack the most common payment method for scams head on.
Businesses will have a responsibility to report and respond to scams.
For example, banks will need systems that identify dodgy payments and accounts and then take action to protect members.
Telecommunication companies will be required to block known scam numbers.
Social media platforms will need to have stronger anti‑scam actions – including verifying advertisers and taking down scam pages.
We will ensure that there is a clear pathway of support for victims and targets of scams.
The codes will impose an obligation on businesses to help their customers directly with complaints –
Backed up by an independent external process to escalate complaints.
And if there is a breach of the code, the bank, telco or digital platform will be held to account.
If they drop the ball and a victim loses money, they will be liable to compensate the victim.
That liability may be shared between more than one business.
Because scams often involve more than one bank – one that makes the payment and another that receives it.
Many involve a telco or a social media platform.
Some involve both.
All businesses that benefit from the digital economy have a role in protecting consumers.
And that includes redress for consumers for authorised transactions where appropriate.
This is an important point.
It is why we need to change the law.
We already have an ePayments code which sets out rules to provide redress for consumers when there is an unauthorised payment.
Such as when a credit card is charged after being reported as stolen.
A fundamental characteristic of scams is that they are transactions that are authorised – through deception – by the victim.
So the law is not fit‑for‑purpose.
We will address this to ensure victims can receive compensation in the right circumstances.
Compensation for inaction, for negligence, for failing to meet an obligation is a critical part of our framework.
But it should not be the first line of defence.
Prevention is.
We should be preventing scams before they can inflict harm.
With clear expectations and obligations, the regulators will be empowered to take strong enforcement action for shortcomings.
Including imposing significant penalties on non‑compliance.
The banks, telcos and social media companies will have a financial incentive to detect and disrupt scams.
This will lead to a significant uplift in prevention and resilience measures across the ecosystem.
Because this approach holds these institutions genuinely and appropriately accountable.
And it will set out fair terms by laying out clear responsibilities in legislation.
Effective.
Enforceable.
Fair.
The banks, telcos and digital platforms will be subject to the codes first.
Because this is where the greatest harm is happening.
The law will be made in a way so we can apply codes to other sectors in the ecosystem that experience an increase in scams.
This should include sectors such as digital currency exchanges, superannuation and online marketplaces.
We are developing the legislation right now and it will be introduced to Parliament as a priority.
This will be a game‑changer in the fight.
It won’t be set and forget.
The threats will evolve as technology changes.
Artificial intelligence is an obvious example.
It brings many benefits.
But we have already seen it used to create deep fakes of celebrities promoting investment scams.
Imagine the danger these can do once they can impersonate you or your loved ones.
Conclusion
When we came into government, Australians were among the most lucrative targets in the world for scammers.
The goal of the Albanese Government is to reverse that.
We will make Australia one of the hardest targets in the world for scammers.
Because we want Australians to earn more and keep more of what they earn.
And that means keeping their money safe.
And that they feel secure when they use the rails of modern commerce.
And that they know that everyone is working together on this.
That means government leading the national effort.
Australians becoming more aware to the risks of scammers.
And all parts of business working individually and collectively to keep our money safe.