ACCC urges new laws to tackle scammers

The consumer watchdog says current legislation is inadequate, as losses via social media and mobile apps double in 12 months.

Chair of the ACCC Gina Cass-Gottlieb pictured at her offices in Sydney. Picture: Sam Ruttyn

Australia’s competition and consumer watchdog has called for new laws to help protect consumers against online spam and fake reviews, proposing a mandatory code of conduct as the number of internet scams harming vulnerable Australians ramps up.

As part of its fifth report into online digital platforms, the ACCC has proposed that the platforms be subject to mandatory dispute resolution processes and stronger requirements for combating scams, harmful apps and fake reviews, among other measures.

Losses reported to Scamwatch from scams conducted via social networking and mobile apps almost doubled in the last year between 2020 and 2021, with $49m recorded in 2020 compared with $92m in 2021.

“This shows that digital platforms need to do more to stop their users from being scammed,” ACCC chair Gina Cass-Gottlieb said.

“It‘s critical that they’re safe for Australian consumers to use.”

The laws would force digital platforms to provide user-friendly processes for reporting scams, harmful apps, and fake reviews, and to respond to such reports. The platforms would also be required to reduce the risk of scams by verifying certain business users such as advertisers, app developers and merchants.

“Our analysis has identified concerning consumer and competition harms across a range of digital platform services that are widespread, entrenched, and systemic,” Ms Cass-Gottlieb said.

“Digital platforms that host or otherwise act as intermediaries between scammers and their victims are in a unique position to identify and stop scams and remove harmful apps.”

Ms Cass-Gottlieb pointed to similar efforts in Europe, which has a proposed Digital Services Act, along with new regulations in the UK and Japan, and said that Australia is part of a global, co-ordinated movement towards sensible technology regulation.

“We think this would reduce potential regulatory burden on global platforms, so that they would be more straightforward to put into place and also provide greater legal certainty,” she said.

The federal government, who was handed the report on September 30, said it was considering the reform suggestions.

“The government is considering the ACCC’s recommendations and will consult publicly to seek the views of stakeholders as part of its efforts to ensure Australia has the right regulations in place to be a leading digital economy,” Treasurer Jim Chalmers said in a statement.

“The Albanese government is already strengthening consumer protections, including through recently introduced legislation to prohibit unfair contract terms and increase penalties for anti-competitive behaviour, and has committed to establish a new National Anti-Scam Centre.”