Albanese government ‘concerned’ over tech sector’s weak response to scams and fraud

Assistant Treasurer Stephen Jones has flagged plans to introduce tougher mandatory codes of conduct for the tech, telco, and banking sectors in “weeks, not months”.

The Albanese government is preparing to force social media platforms to obey mandatory codes of conduct after warning the technology sector’s voluntary approach to combating scams and frauds may be falling short of expectations.

Assistant Treasurer Stephen Jones told The Australian he was concerned about the Australian technology sector’s voluntary code of practice to deal with scams and frauds, which was modelled on the United Kingdom’s version.

Mr Jones said the tech sector had not delivered a “meaningful uplift” in its response to scams and frauds on social media platforms.

“It hasn’t met that benchmark in my view,” he said.

It comes after The Digital Industry Group Inc, a not-for-profit advocacy group for the tech sector in Australia, announced its voluntary code of conduct for the sector to deal with scams and fraud in July.

Labor MP Stephen Jones during Question Time in the House of Representatives. Picture: Sean Davey

The Australian code was modelled on the UK tech sector’s Online Fraud Charter, a voluntary deal signed between the UK’s tech sector and the British government in November last year to reduce fraud on their platforms and services.

The Australian Online Scams Code was signed by Discord, Google, Meta (operators of Facebook), Snapchat, TikTok, Twitch, X, and Yahoo.

The platforms took a role in agreeing on the code, seen by some as a signal the industry was seeking to get out ahead of the Albanese government’s mandatory code.

Several platforms which signed on to the UK’s code, including LinkedIn, eBay and Amazon, did not sign on to the Australian code.

Elements of the banking and finance sector remain concerned social media giants are shirking their responsibility to fight crime.

They note the Australian industry’s scam code also offers weaker commitments across several areas compared to the UK’s charter.

This includes removing a transparency reporting requirement which obliges code members to provide help centre articles and transparency reports “on how platforms are working to keep users safe, and how users can keep themselves safe from fraud”.

Australia's four big banks, Commonwealth, Westpac, NAB, ANZ will be held to a mandatory code of conduct under proposed legislation from the Albanese government.

The Australian code also changes the wording of several matters, including a requirement to “remove fraudulent content immediately” to instead suggest it be taken down “expeditiously”, albeit noting this should take place “within 24 hours of the content being determined to be part of a scam”.

DIGI’s code is also less specific on certain points, including changing a requirement for its signatories to address “fraud, money muling and associated behaviours”, to just reference “scams”.

The Australian code also walks back commitments made in the UK code to “deploy verification measures of sellers” to “move towards introducing reasonable and targeted measures” for the users of platforms, including Facebook Marketplace.

However, DIGI’s code does include several requirements on messaging platforms to deal with scams and fraud that are not present in the UK’s charter

Westpac employee Jack Hearn-Sarchfield shows Assistant Federal Treasurer Stephen Jones, Westpac CEO Peter King and Dr Andrew Charlton Member for Parramatta the Scam Assist operations.

Mr Jones said he expected the UK’s code “would have been a bare minimum” for Australia’s tech sector.

“Unfortunately it wasn’t,” he said. “It sent a signal to me that they’re not serious.”

But, DIGI managing director Sunita Bose said the group’s code “represents a direct declaration on scams from global companies to protect the Australian public”.

“Ahead of the introduction of the government’s anti-scam legislation, the Australian Online Scams Code is an important — albeit voluntary — step towards the promised pre-election social media scams code,” Ms Bose said.

She said “scammers work hard to move off public platforms and slide into direct messages”.

Mr Jones said the UK’s scam code was an “important step” for the tech sector, but noted the Albanese government was focused on implementing mandatory obligations for the sector.

“For social media platforms, this will include obligations to verify advertisers and pull down malicious and fraudulent content,” he said.

Mr Jones said the Albanese government would require social media platforms to pull down scams “in real time” if they received a notice from a “reliable trusted source”.

“The longer these posts stay up there, the more Australians will lose money,” he said.

Australia’s banks have attempted to raise their own concerns with the social media platforms over their failure to combat scams, with Westpac revealed to have repeatedly written to Facebook owner Meta over customer losses.

In a letter seen by The Australian, Westpac customer and corporate services group executive Carolyn McCann raised 360 scam incidents with Meta, warning the social media platform its efforts to deal with scams was falling flat.

However, Meta pointed to its efforts to require advertisers to provide a verified phone number before posting ads as a sign it was taking the issue seriously.

Separately, Meta has sought to defeat legal action from Fortescue boss Andrew Forrest who is suing the social media giant over its failure to stop scam ads using his likeness to advertise fake cryptocurrency investment schemes.

Mr Forrest is suing Meta in California, after local legal action against the tech giant was dropped amid jurisdictional concerns.

Meta claims the scams using Mr Forrest’s image are the responsibilities of third parties using its platforms to post the paid ads, relying on laws from 1996 to back its case.

The Australian Competition and Consumer Commission is also suing Meta over scam ads on its platforms.

The ACCC estimates Meta made up to $5.1bn from Australian companies last year, despite only declaring $1.4bn in revenue and paying $42m in income tax.

This was largely because Meta routed most of its sales through low-tax countries like Ireland.

Meta also recently pulled out of deals to fund Australian media, worth an estimated total of $210m.

Mr Jones said no company was “above the law in the country they operate”.

But, he flagged the government would introduce a code of practice for the tech sector along with other codes for the banking and telecommunications industries, with work currently underway in Treasury and the Department of Communications.

“Beyond that, you can anticipate we’ll have to move pretty quickly on to superannuation and other areas where harm is likely to move,” he said.

“Wherever there is a weak link, they (the scammers) will go.”

Mr Jones said the code of conduct for social media platforms was being worked on alongside a response to moves by Meta to pull out of funding deals with media companies.

The Assistant Treasurer said the response from the government was “weeks, not months” away.

Westpac chief executive Peter King and Australian Banking Association chief executive Anna Bligh. Picture: Supplied

Australian Banking Association chief executive Anna Bligh said big tech companies were “taking Australians for a ride”.

“These are global companies and it’s beyond comprehension that Australians are getting less scam protections compared to people in other countries,” Ms Bligh said.

“Banks are stepping up to the plate with enhanced protections for their customers and these platforms should also be doing the same to protect their users.”

Westpac announced on Monday that it was rolling out new technology to its business banking clients to fight fake invoice payment scams.

The bank said its payee validation system would help stop mistaken payments as well as payment redirection scams.

Westpac said its Verify feature for small business and retail customers, launched in April, had saved more than $50m from scams and mistaken payments.

Westpac Institutional Bank chief executive Nell Hutton said the bank was concerned about its large business and government clients being targeted by scammers.

“When scammers manage to steal funds from these organisations, the damages are significant and can have knock-on impacts for their customers and suppliers,” Ms Hutton said.

The Customer Owned Banking Association, representing Australia’s smaller and regional lenders, is also concerned about scammers using social media platforms.

COBA chief executive Michael Lawrence said the sector continued to invest in fraud and scam protection “but the fight against scams requires a united front”.

“Scammers are sophisticated criminals operating within a complex network, which is why we need an ecosystem approach to combat their activities,” Mr Lawrence said.

“Many scams start with a social media post, a text message or an email, so to effectively disrupt these criminal networks, all industries within this broad ecosystem must step up their efforts.”