AFCA welcomes Government’s scams prevention framework and single scheme for disputes

David Locke

AFCA welcomes the Australian Government’s announcement of its intention to establish a Scams Prevention Framework to prevent, detect, and disrupt scams and to enable consumers to seek redress through a dedicated external dispute resolution (EDR) scheme for scam complaints.

“We welcome action from the Government to address the immense harm caused by scams, and to fill gaps in the law that make it hard for those affected by scams to access redress,” AFCA’s Chief Ombudsman and Chief Executive Officer, David Locke said.

“We understand the important role that AFCA will play to support the Government’s intention to prescribe AFCA as the EDR scheme for scams, covering not only financial firms but also telecommunication service providers, and a range of digital platform services – this will greatly assist consumers affected by a scam.”

“As an established EDR scheme that receives more than 100,000 complaints per year, we have experience in managing and resolving scam complaints,” Mr Locke said.

In 2023-24, AFCA received approximately 11,000 scam-related complaints – more than 900 a month.

“We believe both consumers and firms will also benefit from having mandated internal dispute resolution mechanisms where none currently exist and access to a single ‘front door’ for external dispute resolution where a complaint remains unresolved.”

Mr Locke added that AFCA looked forward to the consultation on the exposure draft legislation. “We look forward to reviewing the draft legislation. It is important that consumers have greater protections than currently exist and more effective avenues for redress if impacted by a scam.”

“Digital platform services, banks and telecommunications service providers, should not wait until they are required by Codes to take action but should now take all actions possible to prevent, detect and disrupt scams, and to provide a fair response to customers harmed by scams that continue to breach defences.”

Mr Locke said AFCA looked forward to working with the Government, regulators, the Telecommunications Industry Ombudsman (TIO), the relevant industries, the consumer movement and the community, as this important work progresses.

“It is imperative that people can transact safely and are treated fairly when things go wrong.”

Data

• AFCA received 10,951 scam-related complaints, or an average of 913 a month.
• Scams activity was reflected in personal transaction accounts being the most complained about product overall in 2023-24, while transactions that customers considered unauthorised were the most common issue in complaints to AFCA.
• Overall, AFCA has resolved 450,000 complaints since inception on 1 November 2018, resulting in compensation of $1.4 billion.