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BDO’s forensic services experts have welcomed draft legislation to establish a new scam prevention network but have warned the framework may be too far-reaching in its current form.
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Consistent definitions critical for scam prevention legislation, warns BDO
17 September 2024
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BDO has welcomed the release of draft legislation that will implement a scam prevention framework to better protect consumers against the increasing risk posed by scammers.
However, the firm stressed that the government must clearly and plainly define what is considered a scam and what is not covered by the legislation.
The framework would legislate scam prevention principles to force designated sectors to prevent, detect and respond to scams.
The government is seeking feedback on the effectiveness of the draft legislation and said the framework is an economy-wide reform to protect the Australian economy from scams.
“It takes a whole-of-ecosystem approach to reduce gaps which scammers can exploit,” the government said.
“The framework drives action against scams through strong obligations and includes tough penalties for non-compliance and dispute resolution pathways for consumers to seek redress.”
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BDO forensics service partner, Conor McGarrity, said the proposed framework is far-reaching and will require a comprehensive and joined-up approach between the private sector and regulators.
“The key to the success of this proposal will be ensuring there is a consistent definition of what constitutes a scam and that it is consistently applied,” he said.
“It will be important to ensure that the same definition doesn’t reach too far and encompass broader fraud considerations that are not scams.”
The minister for financial services can designate sectors under the framework, according to the draft proposal.
The proposed framework will apply to banks, telecommunications and digital platform service providers such as social media, paid search engine advertising, and direct messaging services.
Participants in these sectors must have measures to prevent, detect, report, disrupt and respond to scams.
BDO said under the framework, an external dispute resolution tribunal for victims of scams will be established to simplify the process of money retrieval for victims.
BDO forensic services partner Stan Gallo said the government has had “significant success” in previous attempts to protect Australians against scammers.
“On average Australia experienced a 40 per cent decrease in total losses per scam from 2023 to 2024,” Gallo said.
“Our data indicates a significant drop in the average loss per scam report, reflecting effective intervention strategies and a growing public awareness.”
“This is a positive sign, but it also underscores the need for continued vigilance and adaption of our anti-scam strategies.”
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