ADAM STEER:
Stephen Jones is the Assistant federal Treasurer and Minister for Financial Services. Minister, welcome to ABC Radio Darwin. These new laws, how are they going to work in terms of preventing scams? Because my understanding is you can’t force the banks to pay back anyone that’s been scammed, can you?
STEPHEN JONES:
Not quite true. Under the existing laws, we have a mandatory reimbursement scheme. If somebody has had money withdrawn from their account that wasn’t authorised and that’s done under the ePayments code. The problem we have is there’s so much grey area and the scams are becoming so incredibly sophisticated. They’ve been industrialised over the last decade; scam losses were doubling every year. They haven’t for the last year because of some corrective measures we’ve put in place. But it’s quite clear we just can’t leave the customers on their own –
STEER:
Yeah, well, that example –
JONES:
More needs to be done.
STEER:
That example I was using with Antonia there. So, the bank originally had said no because she had voluntarily handed her information over to the scammers who had provided – she’d looked up the banks themselves and they had provided her the information which she thought, as someone with English as a second language was okay enough that then she could give them the details, her banking details.
JONES:
In circumstances like that I mean, then it’s no answer to say banks never ask you to give over your passcodes. They never do that. In fact, they make it quite clear you shouldn’t give them over to anyone. But, you know, for all the reasons you’ve outlined, it’s quite clear that the existing arrangements and obligations aren’t strong enough. So, the laws that we’ll put in place look at the entire economy or the ecosystem in which these scams are operating in. So, they come to us via a phone or an SMS message, or they’re published on a social media platform, and the bank is the destination for the scammers at the end of the transaction. So, we’ve got to get all of those bodies lifting their protection again for their customers to keep their business and network safe, to prevent, to detect, disrupt, respond and report to scams. A failure to put in place the proper steps in this area will lead to fines of up to $50 million for the businesses who fail to do that. The reason we’re starting with banks, telcos and social media platforms is that’s where most of the damage is being done. But we’ll move beyond there once we get that locked down.
STEER:
Banks make, I think they made $32 billion worth of profit at the big 4 last year, but only repay between 4–7 per cent of scam victims. That doesn’t seem fair in itself. What exactly are you doing to ensure banks are helping their customers? So, you were saying, unless you do this, we will fine you $50 million for each individual scam? Am I correct that you’re –
JONES:
That’s correct, yeah, absolutely. And I want banks to be on the hook if they’ve done the wrong thing. But I don’t want telecommunications companies or social media platforms to be let off the hook as well. I’ve looked at some data up in Europe at the moment, about half the scam losses at the moment are coming from Meta platforms. That’s not a startup business. In Australia, it makes about $6 billion a year. So, that’s a large entity as well. It’s making more than most of our banks, actually. They need to be in the frame. Telcos need to be in the frame. Banks need to be in the frame if they’ve done the wrong thing. And stronger obligations, stronger obligations to protect customers must be in place. And like we’ve been discussing, fines if they, penalties in compensation if they don’t live up to those obligations.
STEER:
Six to 8 on 157, ABC Radio Darwin. Adam Steer is my name. Your guest is the federal Assistant Treasurer, Minister for Financial Services, Stephen Jones. A text coming in, Minister, why don’t we ever hear on news scammers getting caught or convicted? Is this because they’re not getting caught?
JONES:
Yeah, great question. When we put our policy together, we assumed that the vast majority of this stuff is operating outside of Australia, because it is, and largely in countries where traditional law enforcement can’t work because we don’t have the sorts of relations you need with the countries where they’re operating. In some we’ve got joint operations going in place, but often on the border of war torn countries or in areas where traditional law enforcement can’t get into. So, the traditional law enforcement approach of kicking down doors and dragging people before a court just won’t work. So, we’ve got to look at what will work with what we can do inside Australia.
STEER:
Well, let’s move to one of the other issues. I don’t know whether the 2 supermarkets, the 2 major supermarkets, are going to get painted as the villains of inflation, but the ACCC is alleging Woolies and Coles are now breaching consumer laws, rising prices by 15 per cent prior to some of their big promotional scale – sales. I mean, that’s a scam in itself. How the supermarkets going to get punished here?
JONES:
Well, strong action being taken by our regulator with the full support of the government. I have got to be careful because this matter is before the court. But if these matters are proved – and I have every reason to believe that the ACCC will have done due diligence before they took the matter before court – if these matters are proved, then it is an indictment on those businesses and they deserve the full force of the law. In instances where Australians are struggling and they’re ripping us off with bodgy sales and bodgy advertisements, jacking prices up before they drop them, that’s just not right.
STEER:
And inflationary as we wait to see whether the mortgage rates stay on hold or not for this year. I’ve got a text asking the ACCC themselves have said, good move from the federal government because they reinforced some laws which have allowed us to take this action. And as you say, it is above the courts – in front of the courts at the moment. If it’s successful and if it’s a very, very large fine which we consider it would have to be given the supermarkets are making $1000 million profit per year each. Where does that money go if they get a significant fine? What happens to that money?
JONES:
Yeah, good question. So, in this instance, the ACCC has sought unusual but not exceptional orders where a part of the fine would be diverted towards paying for meals and services to homelessness and low income people as a means of ensuring that some of that money goes towards the people who are hurt most by this sort of alleged pernicious behaviour.
STEER:
You know what? We’ll wait and see what happens. Federal Assistant Treasurer Stephen Jones, thank you so much for your time this morning. Appreciate it.
JONES:
Great to talk.