Aussies warned of ‘sharp increase’ in investment scams: Assistant Treasurer Stephen Jones

The Albanese government has warned of a ‘sharp increase’ in investment scams, which are costing Australians more than $2bn annually.

Assistant Treasurer Stephen Jones has warned of a “sharp increase” in investment scams, which are costing Australians more than $2bn a year.

Mr Jones, who is also Financial Services Minister, said the current volatile financial markets were seeing people “attracted to seemingly impossible to believe invest returns on novel investment products”.

Speaking at the ASIC annual conference in Sydney on Thursday, Mr Jones said he had recently attended a bank office where he heard staffers trying to convince customers not to hand over money to what appeared to be scammers, and the bank staff were unable to deter them from handing over large sums of money.

Mr Jones said while there needed to be a “high bar” to protect consumers, the Albanese government was not going to move to make banks and financial organisations responsible for all scams as it would give scammers

“We should have a very high bar in what we expect them to do to keep our information safe,” Mr Jones said.

“But if banks were held accountable, (scams) would become a honey-pot for fraudsters, scammers and criminals the world over.”

Mr Jones said the federal government was currently watching closely increases in online scams and cyber data breaches.

Assistant Federal Treasurer Stephen Jones expects an increase in investment scams.

He said there needed to be a collaborative approach between government, regulators and business to help combat the increasing incidence of scams, including the ability to share information.

Australia was behind action being taken in other countries such as the UK and Canada in combating scams, Mr Jones said.

He said there needed to be rapid action and response to scams and frauds as they emerged.

“We want to explore more about what can be done with appropriate safeguards.”

Mr Jones said the impact of scams was falling more heavily on more vulnerable sectors of the community including those over 65, first nations people and people with a disability, but it was also affecting more sophisticated investors.

Banks and other companies needed to be able to move quickly to alert authorities of data breaches, he said.

“It is about cutting off the flow of information at its source.”

Mr Jones said the recent spate of cyber hacking and data breaches had left “consumers concerned and vulnerable”.

Stephen Jones said the recent spate of cyber hacking and data breaches at Optus and Medibank had left ‘consumers concerned and vulnerable’.

Payment redirection scams were now the most common forms of scams in business.

Mr Jones said companies needed to move towards electronic invoicing and not using PDFs and emails to send invoices.

He said “small and micro businesses” were especially vulnerable to these sorts of scams.

Mr Jones said sending invoices by “outdated” email was no longer considered a safe or efficient way for billing.

“This is one of the fastest growing areas of scams,” he said.

“It is taking businesses who are already doing it tough, to lose thousands of dollars through invoice payment frauds.”

“We need to make a leap step (against it),” he said.

Mr Jones said accelerating the take-up of electronic invoicing was in the interests of small business.

“Confidence in the system falls apart unless consumers and businesses have certainty that they are paying the right person,” he said.

People should be able to quickly reclaim their stolen identities to reduce the harm done to them as a result of cyber hacking.

Mr Jones said more work needed to be done between federal and state governments in this area to help people be able to get new drivers licenses if their data had been hacked.

Reform of consumer protection laws was “critical to functioning markets”, he said.

The federal government was also looking at regulating the “buy now pay later” sector and would soon be conducting formal consultations with the industry, he said.

Mr Jones said the sector “needs to be seen through the prism of credit and regulated appropriately”.

Originally published as Aussies warned of ‘sharp increase’ in investment scams: Assistant Treasurer Stephen Jones