Westpac chief executive Peter King calls for social media ‘regulation’ to combat scams

Peter King wants the federal government to regulate social media giants such as Facebook if they do not take more action to crack down on financial scams on their sites.

Westpac CEO Peter King will urge the federal government to take ‘quick and decisive action’ against social media sites. Picture: Richard Dobson

Westpac is calling on the federal government to regulate social media giants such as Facebook if they do not take more action to crack down on financial scams on their sites.

Westpac chief executive Peter King will urge the government to take “quick and decisive action” against sites such as Meta if they do not act fast enough to clean up their sites, when he appears at the House of Representatives Standing Committee on Economics in Canberra on Thursday.

In an opening statement to the committee, Mr King will accuse social media companies of being “missing in action” in the battle against financial scams.

“Digital platforms and social media companies are missing in action when it comes to the fight against scams,” he will say.

“Too often, Australians are getting their investment advice from ads they’re finding online, including on Meta platforms.

“The Australian Financial Crimes Exchange estimates that 40 per cent of all scams originate from these platforms.

“These companies need to act.

“If they do not, the government should move decisively and quickly to regulate them.”

Mr King’s comments follow a warning by Assistant Treasurer Stephen Jones this week that the government was preparing to force social media giants to obey mandatory codes of conduct.

Mr Jones said he was concerned that social media companies were not taking enough action to comply with the technology sector’s voluntary code of conduct to deal with scams and fraud.

The code was announced by the sector in July.

Westpac customer and corporate services group executive Carolyn McCann, who will also appear before the committee on Thursday, wrote to Meta this month raising 360 scam incidents noted by the bank since October 2023. She called on Meta “to review the way the Facebook platform is being used to scam ordinary Australians”.

She said Westpac had been alerted to at least 320 customers who reported they had been scammed through Meta’s Facebook Marketplace platform.

Another 40 Westpac customers reported they had been scammed through house or car rental ads on Facebook.

Several customers lost thousands of dollars on the scams, including one customer who lost $80,000 on a crypto scam advertised on Facebook.

A recent court judgment found half the cryptocurrency-related ads on Facebook were scams or violated Meta’s policies.

In two days of hearings, the committee is expected to question all four major banks on what they are doing to combat scams.

In his statement to the committee, Mr King will argue that social media platforms are profiting from illegal ads targeting Australians. Investment scams present the greatest area of concern, accounting for around 50 per cent of all customer losses.

Westpac has spent more than $100m over the past two years in prevention measures, including blocking transactions to some digital currency exchanges which Mr King will point out “has been a major contributor to bringing these losses down”.

Westpac says the measures taken by the bank have seen customer net scam losses down by more than 30 per cent year on year. Other measures include upgrading its technology over the past 12 months to strengthen defences against scams.

This has included the launch of Westpac Verify, which lets customers know if the name and account details match in payments before any money is sent, and Westpac SaferPay which questions customers wanting to make payments to sites which have a high risk of being scammers.

The bank is also piloting a service called Westpac SafeCall, which provides customers with verification to prove Westpac is calling them, and not a scammer.

Mr King will say that his bank is “continuing to focus our efforts on making Australia a hard target for scammers”.

The Australian Competition and Consumer Commission this year hit out at Meta for its handling of scams, warning the tech giant was the worst to deal with when trying to stamp out financial crime.

This included “celeb-bait” cases where fake public figures “endorsed” products.

Commonwealth Bank chief executive Matt Comyn will also appear before the committee on Thursday, with the chief executives of the National Australia Bank and the ANZ scheduled to appear on Friday.