Kate Chaney (Curtin, Independent) Share this | Link to this | Hansard source

Some of the most heartbreaking constituent cases that come through the office are scam complaints—people who believe they've participated in genuine banking and finance transactions only to discover that they've been tricked and their money is gone. The number of people calling me to ask for help recovering money from a scam has increased in recent months. It's not just elderly constituents struggling with new technology; it's people of all ages, and it can involve the loss of remarkably large sums of money. Scams are a rising global problem. Scammers evolve quickly, taking advantage of the newest emerging technologies to impersonate official phone numbers and email addresses and to create fake websites of legitimate organisations. Because so many of the operators are overseas, they're really hard to pin down.

I met with Choice recently and discovered some alarming statistics. Choice said nine out of 10 people have come across what they suspect to be a scam in the last 12 months; 84 per cent of people are being more cautious financially online because of scams; 64 per cent of people worry that they could lose money to a scam; and 66 per cent of people think digital platforms such as Google and Meta aren't doing enough to protect people from scams. The Australian Competition and Consumer Commission published a report earlier this year that revealed that Australians lost a record $3.1 billion to scams in 2022. This is a colossal 80 per cent increase on total losses recorded in the previous year. The report showed that investment scams were the highest loss category at $1.5 billion, followed by remote access scams and payment redirection scams. Traditional electronic bank transfers remain one of the most commonly reported means of payment to scammers, but social media scams are apparently the most profitable. ASIC found that banks only reimbursed two to five per cent of customers affected by scams.

When I spoke with representatives from the Commonwealth Bank of Australia, they agreed that there has been a huge spike in scam activity over the last four to five years. CBA said there are a number of reasons for the increase, including the New Payments Platform, which makes money transfers quick and easy for all the right reasons but therefore also allows fast and seamless transfers for criminal activity. Money is now moving so fast in our global economy that it's hard to keep track of and even harder to recover. Since COVID started spreading around the world, there's also been an uptick in people moving to digital systems. More people use digital technology, and that means more opportunities for sophisticated scammers. CBA also reported that it's seeing increased scam activity with the increased use of cryptocurrency. One thing my constituents have raised with me is the embarrassment and shame that comes with being scammed. So often they feel humiliated and upset and reluctant to speak publicly about their experience. Given the increasing sophistication of scams, victims have not necessarily acted foolishly. We must make it harder for criminals to steal money rather than blame the victims.

I want to describe a few of the scams that have come through my office recently. Lisa lost $750,000 in a scam related to setting up an account with the ING bank. After searching online for ING fixed deposits and clicking on the website, she was contacted by phone and email and proceeded to arrange the transfer of funds. Unfortunately the ING website was a fake set up by scammers. The scammers sent through ING forms, which Lisa completed, and signed the contract notes for three transfers of $250,000 each. Lisa's accountant arranged for funds to be transferred. Two weeks later, Lisa was contacted, allegedly by the bank, and offered further financial services, at which point she became suspicious. She investigated the details and found that an amount of $750,000 had been transferred to an NAB account. It stayed there for five days and then was distributed to five other accounts.

ANZ and NAB have both investigated the matter and concluded that the money cannot be retrieved. Lisa has written to the minister and raised this issue with the media. She reported the crime to the police but unfortunately has received no follow-up. Lisa asked me to advocate for tighter banking regulations. She would like to see banks reimbursing scam victims and a system to crosscheck the account name with the BSB and account number before a transfer can be authorised. She would also like to see tighter rules around creating bank accounts to make it more difficult for scammers to set up Australian bank accounts.

John lost $2.7 million in a sophisticated international scam. John was a successful businessman and an experienced ASX trader but was looking for international opportunities to trade. He was scanned by Worldwide Brokers, WWB, in an elaborate scheme, with an investment firm supposedly in Zurich. Two people posed as the managing partner and assistant of the firm. The financial advice provided appeared very good. John was able to track his investments in real time on WWB's website and was called daily by the advisor. He asked for $2.4 million to be paid to him once he had made $2.5 million of profits. The advisor told him he needed, firstly, to pay $1 million under Swiss law for profits, which would in turn be paid to the ATO, plus a further $500,000 to cover account insurance and the commission.

John's bank and superannuation fund raised concerns with him about the transfer to WWB, but at the time he believed the company to be legitimate. The advisers then hatched up an elaborate story about WWB being corrupt and them having to go on the run so they couldn't pay him any money but needed more. The scammers also enabled a bug on his computer, which wiped all the relevant files. John has reported the scam to AFCA and has raised a complaint with CBA regarding the last transfer of $100,000 by an international money transfer. He has also been in contact with the AFP Cybercrime area.

A third case: Tim told us his mother lost $800,000 in a scam. Due to the scam, certain assets were sold, which created a capital gains tax. This resulted in his mother owing $80,000 to the ATO. It's like a double whammy—scammed out of a very significant amount of money and being left with a tax debt on that sum, even though it was stolen, and taxed on money you never received. He has been appealing to the ATO, and now her tax balance is zero. But it appears that whenever she earns money—from dividends, for example—that is being paid towards the $80,000 debt despite it not being payable or visible in her tax statement. Tim asked me to advocate for a change to the tax rules so this doesn't happen again.

So what do we need in relation to scams? I welcome the government's recent establishment of Scamwatch and the commitment it has made to establish new codes of conduct for scam harm. I thank Minister Jones for his engagement on the issue; I appreciated our recent meeting about this increasing problem in my electorate. But I would like to reiterate publicly what I said in my representations to the minister because this problem is only getting worse. We urgently need industry codes of conduct to ensure industry is doing everything possible to reduce harm from sophisticated scammers. Industry codes of conduct need to be comprehensive and to cover banking, social media and telecommunications. A banking scammers code is essential and should be the first code to be drafted. Industry codes need to be mandatory and industrywide, with clear principles for consumer reimbursement. Codes of conduct must require industry to share information to better understand how scammers are operating. There must be significant compensation for victims of scams if industry has not met its obligations under these codes of conduct. I look forward to seeing legislation when it's introduced.

I'm delighted to be hosting the ACCC in my electorate next week for an information session on avoiding scams, because education is another part of what we need to do about this problem. We already have a crowd signed up to learn more about how to operate safely online. Public education with a prominent national campaign is essential in combating financial harms through scams. People need to have the confidence and the toolkit to examine and interrogate information that's provided to them and requests that are made to them.

Scamwatch is becoming an excellent resource, but it's effective only if it reaches as many people as possible. I urge the government to continue to promote and disseminate any information that may help people to recognise and avoid scams, and I look forward to seeing legislation introduced with mandatory codes of conduct for banking, social media and telecommunications to address this increasing problem.