CRAIG REUCASSEL:
Have you ever fallen for a scam or come close? Fake charity scams have spiked this year and over 65s have been hardest hit. It can be embarrassing and some people don’t want to talk about it. But the National Anti‑Scam Centre wants more people to report when they’ve been stung to help save others. Stephen Jones is the Federal Assistant Treasurer and the Minister responsible for the National Anti‑Scam Centre. Morning, Minister.
STEPHEN JONES:
Good morning, Craig. Good to be with you.
REUCASSEL:
So, there’s real focus on scams this week. What are the most common types of scams in Australia?
JONES:
The biggest losses are in investment scams. That’s where somebody thinks they’re investing in a term deposit or some bonds or dabbling in cryptocurrency, only to discover that it was a fake investment site or a fake financial advisor and they’ve done their dough. Romance scams also on the rise. Somebody meets up with somebody online, a dating website or on Facebook, and only to find that the person doesn’t exist and they’ve just been attempting to get their savings squirrelled out of their bank account, and overseas they’re common. Employment scams, also on the rise. Remember those old signs that were on the telegraph pole? You pop off a phone number–
REUCASSEL:
Ah yes.
JONES:
Earn thousands of dollars from your bedroom for working a couple of hours a week? Well, they’ve gone online and they’re as dodgy online as they were on the telegraph pole.
REUCASSEL:
With that, though, is the scam they get you to work for not doing anything, or do they get you to try and pay upfront for training and other stuff like that?
JONES:
Invariably you’ve got to establish account or pay for some training or make some contributions to your online bonus account, which you use to purchase goods and you never get a refund on it. There’s a whole range of different ways they screw our money out, but it all has something similar. You pay a little bit of money on the promise that you’re going to get a lot more back in return.
REUCASSEL:
Now, look, we always say to people, do your due diligence, check into it and that kind of stuff. But some of these scams are becoming quite detailed. They’ve got a kind of great looking website, they’ve gone to a lot of detail. It looks like you’re doing the right thing, as you say, with some of these investment scams. I’ve seen examples of it where you go, wow, I don’t know if I would have gone to that next level of checking here. How do we protect people from this increasing sophistication of scams?
JONES:
Well, there’s a couple of things that you can do which are just good rules of thumb, like putting on a seat belt before you head out of the driveway. And if something looks too good to be true, particularly in the area of investment scams like bonds, term deposits, they’re all pretty vanilla products. Nobody’s offering double what everyone else is offering. So, if the rate of return is significantly more than what everyone else is offering. Damn good. It’s almost certainly a scam.
REUCASSEL:
Too good to be true. The too good to be true is the first sign of that. With some of these scams, though, with some of these scams recently, there’s been a bit of a debate about the role that the bank should play. You know, people have talked about the fact that they’ve lost money, where I got a text through on the same number that my bank sends me texts. It’s exactly the same number. It came up in my messages in the same way. In these instances, should we start seeing more of the, you know, should we see banks starting to pay for more of scams as well, so that there’s more of an incentive on, for instance, banks to be preventing this as well? At the moment, it’s very much, once you’re scammed, it’s on you.
JONES:
Yeah, the law is really grey at the moment. So, we have an ePayments code in Australia, which means if you’ve lost money from your bank account and it hasn’t been authorised, like you didn’t authorise the payment, compensation is available. But in those instances where you authorised the transfer of payments, very, very grey, and almost certainly the liability’s on the consumer.
REUCASSEL:
I thought the UK had moved some way, though, towards kind of balancing this up a bit more and saying, this is sometimes a responsibility on the banks. Are we looking into trying to balance this out at all in Australia?
JONES:
I am. What I want to do, and I’ll be introducing legislation in the parliament later this year, is introduce new obligations on banks, but also on social media platforms, on telecommunications companies. So, that example you gave of somebody spoofing a telephone number, so it looks like your bank, they came through a telecommunication system, and a new register that we’ll establish will block or require telecommunications companies to block those sorts of SMS.
REUCASSEL:
Yeah. So, in that case, could a telecommunications company be responsible for the scam in some way, rather than saying the bank pays?
JONES:
Exactly. And that’s the way I think we need to look at it. Banks should be liable for when they get it wrong. Telcos should be liable for when they get it wrong. And social media platforms, which are some of the biggest publishers of these scams, particularly in the fake investments and websites and this sort of stuff, they should be liable if they do the wrong thing and leave their customers vulnerable as well. So, yeah, liabilities are part of it. It’s not the only part. Prevention has got to be the first thing and that’s why the first step has got to be increasing the obligations on all of those institutions to keep the customers safe.
REUCASSEL:
Yeah, I think at the moment it’s too much laying on the person that gets scammed at times. It is 18 minutes to 7 here on 702 ABC Sydney Breakfast. I’m talking to the Federal Assistant Treasurer, Stephen Jones, he’s also responsible for scams. We’re just talking about banks and we’ve got a group assignment this week Assistant Treasurer, we’re looking at the price of convenience. So, you tap your card, everywhere you go, you tap, tap, tap. And that means you’re using either Amex or Visa or Mastercard and you’re getting charged these transaction fees. And now the Reserve Bank, when they brought in this idea that we pay for these transaction fees, they said it’s going to change our behaviour because we’ll know, you know, we’ll go in and we’ll be told, hey, if we use Amex, it’s going to be 1.5 per cent, but if we use eftpos, it’ll be 0.3 per cent. So, it’ll change people’s behaviour to using the cheaper versions. I feel like we have gone absolutely the opposite way. We’ve now got to the point whereby people don’t even get offered the opportunity of doing eftpos. Most places you go into, they may say that transaction fees apply, but they don’t tell you the differences between them. This kind of reform by the Reserve Bank seems to have led to the opposite thing happening. We’re now generally paying the higher transaction fees and that’s become the norm.
JONES:
Yeah, it’s why the government’s looking at implementing something called least‑cost routing, which is a requirement on merchants to ensure that if they’re using those contactless payment methods, you know, the tap and go type pay methods that they have available, the least‑cost mechanism for the consumer to transact, which will generally be eftpos, not always–
REUCASSEL:
But can you tap though? I mean, isn’t the problem that the tapping is all linked to your Visas and your Mastercards and your Amexes? If I tap, I can’t tap and do eftpos, I’ve got to stick it in there. So, are you saying you’re going to get it to a point whereby if I tap it will actually go to the least‑cost version, which is the eftpos version?
JONES:
Yes, that’s right, by default. So, the consumer can always override that. And there’ll be many consumers who say, you know, I actually want to go. I want it to go via the visa rail or the–
REUCASSEL:
Because I’ve got some kind of point system or whatever going on–
JONES:
Yeah exactly, or they’re just, you know, managing their cash flow like that. Australia is probably the second largest users of these sort of payment methods in the world. I think our retail transactions are about 88 per cent non cash. So, tap and go type arrangement. So, a couple of things. So, firstly, looking at least‑cost routing, but also looking at the actual cost of the transaction as well, to ensure that it is, particularly in those instances where merchants offer no choice, that the charge involved in that is no more than it actually costs the person to use that payment.
CRAIG REUCASSEL:
Actually, just on that front, there was–
JONES:
It shouldn’t be any higher.
REUCASSEL:
Just on that front. One of the interesting things about doing this group assignment is we’ve had a fair few people come in text in who are businesses who say, regarding tap and go charges, the flip side is that the merchant has no idea what they’re going to be charged by the bank. For instance, Visa card or Mastercard can have different charges for the merchant. They’re not the same. It’s only when the bank statement comes in that you actually find out. So, in some cases they’re being charged, you know, the shop itself doesn’t know. So, how can they charge you? Say, you know, I’m not going to overcharge you for your Visa or Mastercard or whatever, if they don’t even know what they’re going to be charged by the bank?
JONES:
Yeah. And in many instances, they’ll just put a buffer in there to ensure against that exact uncertainty that you’re describing. It’s actually not quite, if you’re a large business, then you’ll know exactly what those transactions are going to cost you, because you’ll have it. You’ll have a negotiated agreement with the big card payment providers. It’s the smaller ones who are subject to the uncertainty in all of this. We’ve got a piece of legislation before the Senate at the moment which I hope gets cleared in the next sitting period, which will provide more powers to the government and to the payment systems board to dig in underneath these charging arrangements to ensure that consumers aren’t being screwed by price gouging in those very opaque transactions, the tap and go transactions, because, as you’ve described, there is such a lack of transparency in a lot of it, and it needs to be reformed.
REUCASSEL:
Yeah, absolutely. Well, I got to say, I think based on the texts we’re getting through from people who are utterly frustrated about the fact that they go to places that don’t accept cash, don’t really offer them eftpos, they have to tap the whole time. Least‑cost routing sounds like something that definitely needs to be done. We’ll follow up on that later, thanks to speaking. Talking to us, Stephen.
JONES:
Good to be with you.
REUCASSEL:
Assistant Treasurer Stephen Jones there, the minister responsible for the National Anti‑Scam Centre and also looking into least‑cost routing that could solve our problems of all these transaction costs.