7 point election commitment paper

Item #1:  Ensure all banking payment transactions are visible and transparent to an independent third party

Commitments SVA would like to see:

• Fast track accountability for the banking and payments sector to be be transparent about money transfers and laundering in the global payments system - no transferring and receiving institution to be exempt.

• Capture the difference between money going into ‘crypto’ or digital foreign currency exchanges versus money being laundered through shell companies and money mules.

• Ensure 3-5 ‘hops’ are captured in the system and revealed to an independent body.

• Addresses extreme information asymmetry and enables Victim recourse, ideally without victims spending $20-$30K on “discovery” in civil legal action.

• Positive use of the data collected by government to assist victims - currently no support for victims in any system.

• Ensures all victims have confidence their financial institution is not lying when they partially  ‘recover’ funds but not the entire amount.

• Accountability for financial industry and other scam enablers.

• Give victims assurance the government is looking out for them.

• Demonstrates that enablers can demonstrate they have nothing to hide.

Political Imperative

• Cyber-enabled fraud can be stopped with transparent processes

• Scam Enablers seek to profit by charging interest on financial crime losses for customers

• Scam Enablers hide behind rules of confidentiality to continue enabling industrial-scale fraud from which they benefit

• If you have a bank account, you are a potential victim

• If you have ever transferred money online, you are a  potential victim

• If you have ever emailed your licence, passport or identity documents, you are a potential victim

• If you have a mobile phone, you are a potential victim

Item #2: When names and account numbers aren’t an exact match in the payments network, financial institutions must be considered ‘on notice’ of fraud AND it must be considered a ‘mistaken payment’ under the ePayments code

Commitments SVA would like to see:

• All Payee Confirmation Victim losses failures, (exempting gross negligence only) to be 100% reimbursed if financial institutions fail to check, including if they allow customers to override name checks.

• All Payee Confirmation Scam Frauds (also called APP fraud) should be prevented or reimbursed.

• Banks, telcos and big tech must be transparent about businesses and individuals committing fraud on their platforms (mule bank accounts, fake online profiles, SIM fraud etc) and share this information with police and victims as a matter of urgency.

Political Imperative

• Banks continue to say they do ‘all they can’ but fail to have robust processes in place to prevent misnamed transactions, allowing fraud to flourish so Australians become unfairly targeted

• Since 2011, the Government has failed to act or take sufficient responsibility for shared risks across banks, telcos, tech, and regulators that would have prevented extreme financial hardship, mental health harms & the loss of $10b out of our economy. 

• Every Australian has already suffered indirect scam losses through $4b ($150/person) Australian Tax Office frauds - Operation Protego, MyGov fraud and bushfire and flood relief have all been defrauded due to inadequate cybercrime and scam laws. 

• How much more do constituents have to lose before effective  action is taken?

Item #3: Electronic bank transfers need to be slowed down - over usual daily limits. Especially home payment transfers, term deposit transfers and other high-harm transactions.

Commitments SVA would like to see:

• Slow all large electronic bank transfers to 48 hours - at least to new recipients

• From a consumer perspective there should be minimal impact

• Banks stand to gain from interest earnt on held moneys

• Allows opportunity for scams to be caught

Political Imperative

• Scams thrive in the immediacy and pressure of people being duped into a transaction

• Even Russia has slowed down transactions to 48 hours to stop scammers

Item #4: Receiving banks must be accountable through AFCA for their role in scam mule accounts  

• Burden of proof needs to be low (IE - bank must offer evidence when asked by AFCA)

• 6 -8 year time limit

• AFCA need to be able to compel evidence perhaps by co-operation with AUSTRAC, The Financial Crimes Exchange or Fintel Alliance.

• Scam victims loss amount needs to go up to $2.5-$5 million given the extreme harm that’s been happening recently

• Victims need to see an anonymised evidence trail that the money leaves the mule account and we want to see the platforms that accept the money fro the next 3-5 hops

• Banking Code must support the SPF and the Government failure to stop scams in 2019 with confirmation of payee

Stop banks supporting mule accounts and money laundering

Commitments SVA would like to see

• Customers should be reimbursed unless they are grossly negligent.

• A reimbursement formula to be applied, rather than at the discretion of banks.

• Scam Enablers to establish a Retrospective and Future Fraud Accountability Fund (similar to insurance payout model), capped at a level to fully reimburse 90% of Scam Fraud claim  amounts, provided there has not been gross negligence by the customer.

• The reimbursement fund could be financed from the prosecutions of laundering. AUSTRAC prosecutes banks for not monitoring laundering but does not currently prosecute on behalf of victims or provide restitution to victims.

• Ensure allows for retrospective claims pre-dating legislation/fund establishment

• Incentivises all Scam Enabler services to improve their fraud prevention systems - the better their protections, the less they pay out. This is simply good business.

• Ensures those best placed to manage the risk own the risk. Instead of Scam Enablers spending on public relations and advertising campaigns  claiming their security is “Safe as”, they invest in financial systems to actually make their systems “Safe as”.

• Cost of Reimbursement Fund shared by all users of Scam Enabler systems - sharing the real costs of doing business instead of an unlucky few paying for all systemic failures.

• A Retrospective and Future Fraud Accountability Fund captures and redresses wrongs against historical victims who have been forgotten, ignored, and shamed by successive Governments and Finance Industry who are liable for the past 25 years, having collectively overseen the greatest ever erosion of and failure in Consumer Protection in Australia’s history.

• A Retrospective and Future Fraud Accountability Fund dis-incentivises scammers since they know they are up against the power of the banks, rather than unsuspecting victims.

DISTRIBUTION OF SCAM COMPLAINTS

• 995 had $1-$1000

• 1959 had $1000 to $5000

• 1538 had $5000 to $20000

• 765 had $20000 to $50000

• 328 had $50000 to $100000

• 236 had $100000 to $250000

• 141 had $250000 and $1m

• 22 had $1m plus

TOP 10 FINANCIAL FIRMS WHO HAD COMPLAINTS AGAINST AFCA

CBA - 4595 - $126.4m

NAB - 2343 - $83.1m

ANZ - 2064 - $73.6m

WBC - 1708 - $74.5m

Bendigo Adelaide Bank - 818 - $26.4m

Citigroup - 770 - $9.5m

ING - 537 - $12m

St George - 478 - $16m

Suncorp - $12.9m

Bank of WA - $10.8m

• Big tech, telcos and banks are profiting from Australia’s cybercrime and consumer protection gaps that traumatise victims, endanger social cohesion and perpetuate generational inequality.  

• The trauma of this crime is under-estimated by the community, and some financial redress is needed in the immediate loss stage to remediate the harm

• Cost of known Scam Fraud  exceeds 0.1% of the Australian Gross Domestic Product annually and is known to be far more than this

• With AI, Scam Fraud is accelerating exponentially. Australia’s weak laws and relative wealth have made us an international target and honeypot

• If the Federal government had adopted Treasury’s and  the ACCC’s recommendations in February 2011, and if they had followed the overwhelming evidence from the UK and other countries, then Confirmation of Payee and a Contingent Reimbursement Model would have been adopted. 

• Bank transfer victims would have had the same protection as for credit card fraud.

• Many victims have suffered enormous losses. AFCA statistics for the second half of 2023 show that 17 victims lost more than $1 million, and none were reimbursed. 

• Such  funds  have been established for the Robodebt  Victims, Victims of Child sexual abuse, the Victims of the Catholic Church etc, why not for this other Government failure? Why should victims pay because the government and banks did not put in protections?

• Preventing fraud is a shared responsibility - customers are expected to take reasonable precautions (protecting passwords & awareness of common scams), whilst financial institutions should provide a secure environment for transactions. Blaming scam victims, particularly by financial institutions, is unfair and counterproductive to preventing financial crime.

  Item #5: Abolish the ePayments Code’s ‘unauthorised transaction’ versus ‘authorised’ - Stop the ePayments Code being used against victims

Commitment SVA would like to see:

• Repeal the ePayments Code as it applies to Scam Fraud and establish a consumer-centric ScamFraud Code to ensure criminal and civil rules of fraud and money laundering can be appropriately applied.

• Ensure ease of dispute resolution for consumer similar to how insurance industry manages claims.

• Fraud victims never ‘authorise’ their own crime - this is akin to shaming and blaming sexual assault victims.

• Will  require extensive liaison with consumers and Scam Enablers,taking a consumer-centric approach rather than preferencing powerful lobbyists.

Political Imperative

• AFCA has asked the Parliament to remove this framework in its submission to the Senate about SPF

• Cybercrime is the third largest economy in the world after the USA and China, according to the World Economic Forum

• Scam Fraud is known to fund international crime, terrorism (including recent anti-semitic attacks in Australia), human trafficking, drugs, war crimes etc

• Scam Fraud allows motivated foreign criminals, including governments, to fund illegal and nefarious activities 

Item #6: Single regulatory body to take responsibility for Scam Prevention Framework and accountability to victims

Commitments SVA would like to see:

• Regulator bodies are given jurisdiction to investigate Scam Fraud based on all the information, including the ability to compel Scam Enablers to provide all evidence

• Consolidate the regulator body into one Scam Fraud fighting regulator.

• The regulatory framework should be revisited. There are many anomalies like AUSTRAC not prosecuting money laundering when it is known. It would be better to establish a Payment Systems Regulator as in the UK.

•  AFCA should be an Ombudsman funded by the government rather than banks. The clear lack of independence of AFCA from the banks they supposedly regulate is a major problem.

• A payment systems regulator would also improve the collection of data which is currently leading to underreporting of scams and fraud.  

• Scam Enablers will be compelled to actually be doing “all that they can” instead of just saying they are

• Will repair reputational damage of Government and Financial Institutions who have lost community trust

• Demonstrates that Scam Enablers walk the talk -  ie demonstrate they have nothing to hide

• Reduces the future need food banking Royal Commissions

Political Imperative

• Consolidating Scam Fraud matters under one agency, can improve efforts to focus on ScamFraud, resulting in better coordination, and reduction in the administrative overheads spread between multiple agencies currently (AFCA, ACCC, ASIC, Scamwatch, ID Care, National Anti-scam Centre,  Austrac etc)

• Simply the current system which confuses consumers without providing any useful assistance to help Victims recover funds 

• Allow proven Victims to access the volumes of Intellectual Property collected from them to assist to build a legal case and/or recover funds.

Item #7:  Education, action plan, law enforcement training, awareness, CPD points and 6-monthly reviews

Commitments SVA would like to see:

• In the new consumer-centric Scam Fraud Code, include a money mule and money laundering action plan that places stricter requirements on establishing and monitoring bank accounts 

• Penalties enforced for Banks who miss clear red flags in account behaviour

• Longer terms (currently maximum 12 months) and requirements for perpetrators to work with Victims of their crimes to  provide Victims with closure

• Will stop the rampant growth of the illegal “on-line bank account sales market”

• Will require Scam Facilitators to monitor for  mule behaviour (advertising, account transfers etc)

• Victim-centric reparations 

Political Imperative

• Singapore has laws that allow the banks to stop transactions they know are fraud

• Banks currently have the power to (and already do) withdraw moneys Banks have mistakenly transferred to and actively exercise these rights when the mistake is theirs - the extension of these powers to freeze or stop APP mistaken transactions should be straightforward 

Australia  is one of the biggest targets in the world for scams and fraud, losing over $5,200 per minute to criminals through scams reported in 2023.

Consumers are losing

600,000+ Australians reported being scammed in 2022-23, with criminals increasingly using ‘social engineering’ to trick people into handing over details of their personal transaction accounts, a weak link in Australia’s ecosystem which causes trauma, extreme financial loss and loss of trust in governments and banks. 

Sophisticated international crime syndicates use scams to launder money relying on ‘mule accounts’ in Australian banks. AUSTRAC says Australian banks face “ongoing risks of exploitation by criminals”.

Policy Initiatives - The Do Now’s:

1. Enforce industry transparency and correct information asymmetry

2. Introduce the SPF now with the following changes:

• Retrospective and future reimbursement - Make those best placed to manage the risk. Incentivise Scam Enablers by making them responsible for reimbursement caused by their own systemic failures.

• Payee Confirmation now - place the onus of “how” back onto industry who have access to information

• 48 hour delay to all new large electronic payments such as house-buying transfers and term deposit transfers.

Policy Initiatives - The Do Soon’s:

• Create a new legislation specific to Scam Fraud, removing the  ePayments code applications

• Establish a single Government Body to manage Scam Fraud with its own Scam Fraud Commissioner or similar.

  Policy Initiatives - The Do in Near Future’s:

• Scam Fraud Commissioner to work on emerging Scam Fraud issues as fast-changing crime typologies evolve.

• Scam Fraud Commissioner to create a money mule, money laundering action plan or fraud strategy or National Fraud Initiative strategy similar to the UK to help guide best government response.