JANE NORMAN:
Minister, thank you very much for your speech. I wanted to bring our attention back to compensation. I know you said it’s not the prevention, but it is the thing that victims of scammers are most energised by. Ninety five per cent never see their money again. Now, you’ve mentioned in your speech the government is establishing a code of conduct that will make companies, including banks, liable for compensation if they do not meet obligations set out in the code to prevent scam activity. We know that there are compensation schemes operating in the UK. How exactly is this compensation scheme going to work? Because to me, it seems like a victim is going to have to firstly prove they’ve been scammed and then go through quite a few hurdles to then basically hold the bank or the telco liable under the code. How is it going to work for a regular Australian?
STEPHEN JONES:
So glad you asked this question, Jane. Firstly, the UK scheme hasn’t started operating. A lot’s been said about it. It starts in October this year, they’re working through the details, there’s a whole bunch of exclusions. And it actually isn’t as extensive as what we’re planning to do here in Australia, because it only operates on the equivalent of their national payments network, not across all payments that are made within the economy. So, let me just say that. Not up and running yet, not as extensive as ours, has a default compensation mechanism in place.
And frankly, if I thought – I’ve looked at it, I’ve looked at it closely. I was up there and spoke to their regulators, their then Ministers and other representatives as well. And if I thought it was a fit‑for‑purpose solution here in Australia, I’d recommend that our government did it, but I don’t. A couple of reasons. Firstly, I am deeply concerned that there is not enough weight put into prevention. It’s a compensation scheme. Yep, that’s good. But surely the objective has got to be to prevent your country being a target in the first place.
NORMAN:
You can’t do both at once?
JONES:
Yes, you can, and that’s what we’re doing. Preventing your country being a target in the first place. Now, if you’re a criminal gang and you know that there’s a country out there that’ll always compensate a victim if you hit them up, and particularly if it’s a bank, that’s almost like a victimless crime, isn’t it? That has a great potential to ensure that far from making Australia a less attractive destination for criminals, it makes you a resort of first option. So, that’s the first reason.
The second reason is – I just want you to think about this as a very common example. Scammer puts a puppy ad, a puppy scam on Facebook Marketplace. Okay? We saw them go through the roof during the pandemic. A victim who is a member of the Broken Hill Credit Union, they’ve probably got a couple of thousand members, falls for that. Under that model, Broken Hill Credit Union is liable for an ad that was placed on Facebook Marketplace, that Meta took advertising revenue on, that the Broken Hill Credit Union had no knowledge of. And I ask you to consider this: why is it fair or more just in a situation like that, or why is it more likely to decrease scams that we hold a small regional credit union liable for something that was published and propagated on the platform of one of the biggest companies in the world? Frankly, you’ll take a while to convince me that that’s a better and more fair outcome.
NORMAN:
So, how will your system work?
JONES:
Under our system, we set the obligations up front. Keep your system safe. Here are the obligations, here are the things that you require. And it doesn’t just focus on banks, because we understand that these criminals are working within an ecosystem. So, it involves social media platforms and it involves telecommunications companies all having obligations, legislated obligations, industry‑specific, we’ll expand them to others areas as we move forward. And if they don’t meet the obligations, general and specific, and somebody loses money, then, yeah, they’re on the hook. And it might be that there’s compensation, it might be that the bank is partially liable, but it also might be that somebody else in the chain has done the wrong thing as well. So, ensuring that there is a system where the victim gets redress because somebody else has stuffed up – absolutely critical.
NORMAN:
And just before I invite our first speaker, I understand that this scheme, along with other protections like payee confirmation, are coming into effect at the end of 2025. That’s the slated date. Is that correct? This was recommended, I understand, back in 2022. Given $3 billion is being lost every year to scammers, why is it taking so long for the government to get this happening?
JONES:
Well, I ask you to consider the fact that when we came into government 2 years ago, there was zero in place. If you’re a victim of a scammer, you were called a mug who was on your own. So, we’ve already, in phase one, stood up a National Anti‑Scam Centre, put in place call‑blocking technologies and obligations, been working across industry ahead of mandatory codes that voluntary measures are put in place. And the measure that you refer to, which is Confirmation of Payee, is being – probably with a bit of persuasion from us – voluntarily put in place by the banks ahead of a mandatory code coming into place. And yes, it will be a part of the mandatory code.
I’d love this to be in place across all banks today, but we’re cognisant of the fact that that example I used, the Broken Hill Credit Union, has vastly different resources and IT capacity available to it than Peter’s bank at Westpac or the Commonwealth Bank or the NAB or the AN — we often think when we talk about banks, it’s the big 4. Actually, there’s a huge variety in their capacity and the size.
NORMAN:
All right, Ron Mizen from the Fin Review.
RON MIZEN:
Thank you, Minister. You’ve spent the first half of the year really very much focused on scams, most of your public appearances have been around scams, but your portfolio is incredibly significant. You’ve got, before the parliament, Consumer Data Right, you’ve got Better Targeted Superannuation. In terms of policies that you said you wanted to get done this term, you’ve got regulation of digital assets platforms, payment systems modernisation, as well as the scam legislation that you’ve talked about. On top of that, you’ve got the News Media Bargaining Code and how you respond to Meta. Are you confident that you can get that all through the Parliament and done before the election? And just on the News Media Bargaining Code and Meta, can you give us a bit of an update? It’s been 5 months now since you said that you would take the first steps on that. Can you let us know where that’s up to?
JONES:
Sure. Thanks, Ron. Look, a couple of things. Busy government, ambitious government, big agenda. I don’t think anybody could look at what we’ve done over the first 2 years, including in my portfolio, and say you’ve been twiddling your thumbs. Nobody, no fair critique of the government could say you’ve been twiddling your thumbs and you haven’t been active across a whole range of areas, including all the ones that you’ve talked about.
So, first, tranche of reforms in the area of financial advice, legislation in the Parliament and regulations around improving performance of superannuation funds, uplift in consumer protections, including small amount credit contracts. We’ve got buy now, pay later legislation before the Parliament. My colleague Andrew Leigh has got legislation that will be introduced in the Parliament shortly around competition and market reform. We’ll have something more to say in the very near future around digital. And by the way, the scams program that I’ve been leading is a part of one of the reports that the ACCC put out around digital market regulation. But to your point, yep, there’s a lot. We don’t apologise for the lot. Three years is a short window. We’re working really hard to ensure we can get all of this done.
I knew one of you was going to ask me about the News Media Bargaining Code, and I’m pleased that you have. Let me just say quite succinctly on this: got a lot of material that I’ve had put before me, is required under the law and under the code, and I think, as your paper and many others have reported over the course of the last few months, the News Media Bargaining Code was a perfectly sensible and effective tool back in 2021 to deal with the circumstances in 2021. Those circumstances have changed significantly, and our response will be a whole‑of‑government response, which will deal with all of the challenges that we face in the news media environment in 2024. And it will include what we do under the News Media Bargaining Code, but it won’t end there, and you can expect us to have something to say about that in the near future.
NORMAN:
Peter Martin from The Conversation.
PETER MARTIN:
G’day. So, you just said it would take a while to convince you that the UK is on the right track. In October —
JONES:
No, they weren’t my words, actually, but keep going.
MARTIN:
‘Take a while to convince me we would get a better outcome.’ That what it’s doing – and by the way, it already voluntarily – the large banks in the UK reimburse customers for frauds. You say it would take a while to convince you that that would achieve a better outcome. In the UK it seems to have given the banks skin in the game. Certainly they have far fewer scams, they’re less of a honey pot than we are.
JONES:
I don’t accept that but keep going.
MARTIN:
Well, we have fewer dollars lost per scams to the UK. What would convince you? In other words, after a year, after a year’s time, if the US [sic] hasn’t become the kind of honey pot you’re talking about, attracting scammers, would you then look at giving banks – banks are the pipeline, they’re where the money goes, they’re how money is transmitted, receiving banks as well as sending banks. If the UK doesn’t have a disastrous income – a disastrous outcome, would you look at it here after a year?
JONES:
Thanks for your question, Pete. And I’ve read your stuff on this with great interest, as you would expect. My exact words were, I’m not convinced that what is happening – what they’re proposing to implement mandatorily from October this year is the best approach for Australia. In response to Jane’s question, I outlined why.
Firstly, there are many players within the scam ecosystem: telecommunications companies, social media platforms, and banks. Some of them are actually some of the biggest companies in the world. Yes, our big 4 banks are big and they’re wealthy and they make a lot of profit, and they should make a significant contribution to uplifting the standards and compensating victims. No doubt about it. But if you looked at the market capitalisation of some of the players in the social media area who are publishing the scams, taking advertising revenue from the scams, have some of the best IT available in the world, and you’re saying it’s a fairer, better, more effective system that we hold somebody like the Broken Hill Credit Union accountable for a scam which propagated and published on a social media platform, that they’ve made money out of, but it’s not the responsibility of the social media platform to do anything about it? I’m sorry, I just don’t agree.
MARTIN:
No, no, I’m not saying that. The banks are the pipeline by which the money is transferred.
JONES:
But they’re not. They’re not. The social media platform and the telecommunications company is the pipeline by which the scams reach their victim.
MARTIN:
From a sending bank to a receiving bank.
JONES:
No, I’m sorry. Look, the best I know it that we don’t have a bank — Look, can I just make this point? If banks are done the wrong thing, they’re on the hook. And we will lift the standard to ensure that they are liable if they have breached a legislated standard, make no mistake about that. They will be on the hook, there is no doubt about it. I don’t think the law at the moment is fit‑for‑purpose, and that’s why we’re doing all of this. But I, by the same token, don’t want to leave the telecommunications company or the social media platforms off the hook for something that they also have a role in, and in fact, in many cases are making money out of. That’s not fair.
NORMAN:
So, you’re ruling out ever considering a system like the UK because you’re going with what you believe to be a better system in the code of conduct, is that what you’re saying?
JONES:
No. There will be compensation available under our scheme, and there will be compensation payable, including by banks and by social media platforms. Nobody ever rules anything out. But we’ve got a program of work in place, and it’s working. Phase one, locked down, working. Phase 2, to be introduced into the parliament. We’re confident it’s the right approach. We’ll see, we’ll have 2 systems in place, we’ll see which one’s more effective. Dr Leigh would call that a randomised trial, I think.
NORMAN:
Our next question is Nic Stuart from AbilityNEWS.
NIC STUART:
It’s a terrific speech and you’ve certainly got the verbiage correct. You’ve given us brilliant examples of what’s going wrong. Australia remains, as you said, one of the countries in the world that has the greatest number of people paying out money for scams. After 2 years, you can’t give us even a roadmap of when this legislation will be introduced. Will it be by the time we go to an election or not? What is it?
JONES:
Thank you and thanks for your question. I’ve given a pretty detailed roadmap of the government’s entire program, including what we’ve done in phase one and the legislation that is being worked on as we speak. And it is my ambition and my desire to have that legislated before the election. When the election is, that’s a date which is called by somebody way above my pay grade.
JANE NORMAN:
Oliver Gordon from ABC News.
OLIVER GORDON:
Just following on from this discussion about the responsibility that the banks hold. So, under this new code of conduct or this new scheme, what would a bank have to have done wrong to be liable or to be, you know, having to pay a victim back?
JONES:
Yeah. So, if a customer has reported that they have seen transactions on their account and they want their account frozen and the bank doesn’t do that and transactions continue to occur on their account, that would be a clear example. Okay? That’d be a clear example of where something has gone wrong. Myself and the Attorney‑General are very focused on mule accounts. We want to see more action taken on closing down dodgy accounts. So, there’s an example. Failure to take action on mule accounts is another example of where they’ve done the wrong thing and somebody has lost. Failure to report to the National Anti‑Scam Centre and that leads to a further or subsequent loss. And there will be others. There will be others.
GORDON:
There’ll be an obligation on banks to report suspicious activity to the Scam Centre?
JONES:
Yes, yes. I just want to be very clear on this – nobody gets a free pass here. Nobody gets a free pass. We are lifting the standard across the entire ecosystem. I just think we won’t get the best result if we take the lazy approach and just say, ignore the rails on which all of these scams are occurring, ignore the means by which they’re being sent to your mobile phone, ignore the means by which they’re popping up on your screen through a platform or a digital device. Ignore all of that. Let’s just focus on the payment at the end of it. That’s not a prevention approach. That’s not a prevention approach. That’s an approach that says, we’ll just patch it up after it’s all gone wrong. It’s not a prevention approach. And we’re on about stopping the losses in the first place.
NORMAN:
Just with the code of conduct and, by extension, the compensation scheme – given that legislation’s yet to pass, and as I mentioned earlier, Australians are losing money as we speak, are you going to be making that retrospective? Would you consider that?
JONES:
No, we won’t. And, you know, retrospective legislation is the rarest of rare things, so we won’t be on this. But all parts of the ecosystem are well and truly on notice about what the uplift is going to have to look like.
NORMAN:
Wouldn’t that really energise them, though, if you made it retrospective?
JONES:
There’s a whole heap of reasons why we don’t retrospectively change rights for people, and it’s done very, very rarely by any government, in any parliament, not only here, but elsewhere around the free and democratic world. Citizens and businesses are entitled to go about their daily lives based on what the law is today and do something based on what the law is today. It’s pretty just unjust and arbitrary if we change the law after they’ve done something and said, you’re now on the hook for it – in any area of life, not just this. In any area of life.
NORMAN:
Our next question is Alexandra Brooks.
ALEXANDRA BROOKS:
Hi, I’m from joincitro.com.au. You’ve called out social media platforms for being offensive, but surely it’s Australia’s banks that have behaved the most offensively over the last few years, letting criminals set up accounts that steal hardworking Australians’ money while blaming and then refusing to refund scam victims. Victims like Levin Salaberry, who’s asked me to share his story today. He had $91,650 stolen from his Commonwealth Bank account last year, ironically by another Commonwealth Bank mule account. And in a letter to Levin offering him $4,582.50 goodwill payment for his loss, the bank told him, and I quote from the letter, ‘the bank is under no obligation to maintain watching briefs for scams for their customers’ benefits.’ As part of your focus on prevention, will the banks be forced to stop letting criminals set up mule accounts that do not meet the 100 points of identity that enable all scams, whether they start on social media or telco? And will the banks be forced to refund the scam victims?
JONES:
Thanks. Great question. And thanks for sharing a personal story. I’ve also heard thousands of them and every one of them breaks my heart. Sympathy is not enough, action is required. And it’s exactly why – the response that you got from that bank is exactly why I want to change the law. It’s exactly why I want to change the law, because the law is currently not fit‑for‑purpose – if I could finish. The law is not currently fit‑for‑purpose because it’s questionable at the moment whether that general obligation –
BROOKS:
Correct.
JONES:
I want to make it unquestionable. I want to put it beyond doubt that there is an obligation in all of the areas you’ve mentioned, including the detection and elimination of mule accounts.
BROOKS:
And Levin’s loss occurred last year, and he’s still not been refunded and he’s –
JONES:
Look, I can’t comment –
BROOKS:
I totally agree.
JONES:
I can’t comment on an individual case. It could well be before a tribunal, it could be well be subject to a regulator investigation, as we are. But the general point I want to make is the example you’ve given, and the thousands of others that I’ve heard, fortify me that we have to change the law because it’s not currently fit‑for‑purpose.
BROOKS:
Thank you.
JONES:
Thank you.
NORMAN:
Our final question today is from Ben Westcott from Bloomberg, but he has been struck down with illness, so Maurice Reilly is asking on his behalf.
MAURICE REILLY:
I think he’s got the flu. He apologised for not being here. Anyway, he’s got an easy question.
JONES:
Now I’m worried, Maurice.
REILLY:
Don’t shoot the messenger. Today’s ABS figures show insurance costs for Australians dropped in the June quarter compared to the previous months, but they still grew by about 14 per cent overall. What’s the government doing, if anything, to try and curb these staggering insurance rises?
JONES:
Thanks. We’ve got – thank you for the question. We’ve got a taskforce underway, jointly working on myself, the new Emergency Services Minister, Jenny McAllister, and the Prime Minister and his department. Insurance is the crystallised cost of a risk. And there’s the most effective thing you can do to reduce underlying the cost of an insurance premium is to address the underlying risks. So, that’s where the majority of our effort is focused, focused on.
So, we all know, everyone in this room knows, that Australia has been subject to more and more severe weather events. It’s the impact of climate change. We’ve got building codes that are not fit for practice in a changing environment, we’ve got infrastructure which is not fit for the job. So, we’ve got a big job. We’ve got a big job to do to. Careful, we’re not doing – we’ve got a big job to do to uplift our resilience. A lot of work is going into that, but the taskforce is looking at what other measures we may be able to put in place to ensure that insurance is more of a affordable for Australians. We should do it because it’s in the public interest. But too often, where there’s not private insurance, the government becomes the insurer of last resort. It’s a public interest, a public good, and a, you know, fiscal interest in us improving fiscal insurance affordability across the country. And I thank you for the question.
REILLY:
Thank you, Minister.
NORMAN:
All right. Please thank – please join me, I should say, in thanking the Assistant Treasurer, Stephen Jones.