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Is the scam prevention framework strong enough to protect Australians?

Catherine Chipeta
6 Min
Scam Prevention Framework

Scam losses in Australia have exploded, reaching $2.74 billion in 2023. In response, the government introduced the Scams Prevention Framework (SPF) Bill 2024, aiming to hold banks, telcos, and digital platforms accountable for preventing scams. But here’s the rub—consumer advocates argue the bill stops short, offering no guaranteed reimbursement for scam victims. The result? A fierce debate among financial institutions, regulators, and consumer protection groups over the best way to shield Australians from financial fraud.

The need for stronger scam prevention measures

Australia’s financial scam problem isn’t going away. Despite launching the National Anti-Scam Centre to coordinate efforts, scam victims continue to see little relief.

The biggest frustration? Banks refusing to reimburse stolen funds, shifting responsibility back onto consumers. Reports from the Australian Financial Review highlight cases where banks leave victims empty-handed.

Consumer advocates are calling for a UK-style reimbursement model, where banks must refund victims unless they can prove gross negligence. While the UK’s Payment Systems Regulator outlines its fraud reimbursement model, the UK’s own Confirmation of Payee (CoP) system has not been foolproof. Multiple reports have shown cases where fraudsters successfully bypassed the system, exploiting gaps in coverage and victims have lost substantial sums even when CoP was in place.

These shortcomings underscore why CoP should not be seen as a standalone fraud prevention tool but rather as part of a multi-layered defence against scams. Additionally, CoP’s design primarily caters to consumer transactions, offering limited protection for B2B payments, where businesses face more complex fraud risks and different verification challenges.

Banks, however, insist that prevention trumps compensation, setting the stage for an intense policy battle.

Key developments leading to the SPF Bill

2024

June 2024

Financial Services Minister Stephen Jones introduced a proposal for stricter scam prevention laws, sparking debate over regulatory gaps.

July 2024

Consumer advocacy groups continued pushing for mandatory reimbursement, citing evidence from international models.

August 2024

ASIC launched legal action against HSBC over its failure to act on 950 fraud cases, which resulted in $23 million in losses.

September 2024

DIGI expressed support for the SPF Bill but raised concerns about regulatory clarity, arguing that tech platforms need clearer obligations.

October 2024

Consumer groups, including the Consumer Action Law Centre and Choice, renewed calls for a presumption of reimbursement, warning that scam victims would remain financially exposed without this measure.

November 2024

The Albanese Government formally introduced the SPF Bill 2024, laying the groundwork for a stronger scam prevention framework.

December 2024

New regulations required telecommunications companies to block scam text messages, expanding industry-wide scam prevention efforts.

2025

January 2025

Senate hearings revealed sharp disagreements between banks, consumer advocates, and regulators. While the SPF Bill progressed through Parliament, consumer groups raised concerns that it failed to mandate victim reimbursement, leaving scam victims without clear financial recourse.

Australia’s Confirmation of Payee (CoP) system advanced, but gaps remain. The Australian Banking Association confirmed progress toward CoP implementation, but experts warned that CoP alone is not a silver bullet against fraud, pointing to UK cases where fraudsters bypassed the system.

CoP’s coverage gaps highlight the need for a broader, multi-layered approach. Moreover, CoP’s current framework is tailored toward consumer transactions, meaning businesses making high-value payments remain vulnerable to invoice fraud and other sophisticated scams.

February 2025

Consumer advocacy groups intensified pressure on lawmakers, arguing that the SPF Bill still leaves scam victims without clear financial recourse.

Concerns over delayed dispute resolution grew, with Senator David Pocock warning that scam complaints could take up to two years to resolve, raising fears that victims will wait too long for financial redress.

Comparisons to the UK’s stronger reimbursement model persisted, as consumer groups continued to advocate for Australia to adopt the UK’s five-day refund rule, which mandates banks compensate scam victims unless gross negligence is proven.

Timeline of Confirmation of Payee (CoP) implementation in Australia

November 2022

Australian Payments Plus (AP+) selected a CoP solution, marking a step toward industry-wide adoption.

March 2023

Swift was chosen to assist with CoP implementation, supporting the rollout.

July 2023

Australia positioned itself among the next global markets to implement CoP, reinforcing its commitment to fraud prevention and strengthening consumer protections.

October 2023

CoP entered an advanced testing phase, moving closer to full-scale rollout.

September 2024

New scam-related legislation incorporated CoP as part of a broader fraud prevention strategy, further aligning industry requirements.

January 2025

Australia is now considered ahead of the UK in implementing national payment protections, with CoP expected to play a critical role in fraud reduction.

Stakeholder positions on the SPF Bill

Government

The Australian Government introduced the Scams Prevention Framework Bill 2024 to establish a cross-sector approach to scam prevention, covering banks, telecommunications providers, and tech platforms.

Key initiatives:

  • Legislative enforcement: The framework mandates scam prevention obligations across industries, with penalties of up to $50 million for non-compliance. More details are outlined in the Treasury’s announcement.
  • Consumer reimbursement pathways: The Bill clarifies how scam victims can seek compensation when businesses fail to prevent fraud. The Treasury elaborates on this in its official statement.

Advocate’s View:
“The Scams Prevention Framework Bill 2024 establishes a world-leading and whole-of-ecosystem approach to combat scams in the Competition and Consumer Act 2010.”Stephen Jones, Assistant Treasurer and Minister for Financial Services, as outlined in his Parliament House speech.

Consumer protection agencies (ACMA & ACCC)

Regulators like the Australian Competition and Consumer Commission (ACCC) and the Australian Communications and Media Authority (ACMA) are pushing for stricter enforcement and stronger consumer protections.

Key concerns:

  • Stronger scam detection obligations: ACMA has called for telcos to proactively block scam messages before they reach consumers. This aligns with its Combating Scams Action Plan.
  • Bank accountability for scam losses: The ACCC is advocating for a presumption of reimbursement, which would require banks to compensate scam victims unless they can prove negligence. These recommendations are outlined in the ACCC’s submission on scam prevention.

Advocate’s View:
“Current legislative and regulatory settings are inadequate and legislation is needed now to disrupt the evil traffic of scams.”David Locke, Chief Ombudsman, Australian Financial Complaints Authority.

Consumer advocacy groups

Consumer organisations, including the Consumer Action Law Centre, argue that the SPF Bill does not go far enough—particularly in ensuring victims receive compensation.

Key concerns:

  • Mandatory reimbursement models: The Consumer Action Law Centre contends that banks should automatically compensate victims, unless they can prove wrongdoing on the victim’s part. This mirrors the UK’s approach, as outlined by the UK Payment Systems Regulator.
  • Bank-led fraud prevention vs. victim support: The group warns that the SPF Bill prioritises scam prevention over victim reimbursement, leaving many Australians with no clear pathway for compensation. These concerns are outlined in the Consumer Action Law Centre’s formal response.

Advocate’s View:
“The Government’s Scam Prevention Framework only goes halfway — we need a presumption of reimbursement.”Consumer Action Law Centre, as detailed in its response to the bill.

Australian Banking Association (ABA) & major banks

The Australian Banking Association (ABA) and major banks favour scam prevention over compensation, investing in customer education and fraud detection tools.

Key initiatives:

  • Public awareness campaigns: The ABA launched the “STOP. CHECK. PROTECT.” initiative to help consumers identify scams before they happen. More details are available from the Australian Banking Association.
  • Fraud detection technology: Banks are implementing NameCheck, which alerts customers if the recipient’s account name doesn’t match their payment details. The system is outlined by Commonwealth Bank.

Advocate’s View:
“Scams are a blight on our society. Every dollar lost is a dollar too much.”Anna Bligh, CEO, Australian Banking Association.

Tech & telecommunications industry (DIGI, Meta, telcos)

The tech and telco sectors have welcomed the Scam Prevention Framework but raised concerns about regulatory feasibility, unclear responsibilities, and high compliance costs.

Key concerns:

  • Defining tech platform obligations: Industry body DIGI has urged policymakers to clearly outline the responsibilities of digital platforms to prevent ambiguity. These concerns are addressed in the DIGI legislative response.
  • Industry pushback on compliance costs: Telcos, including Optus, have described the new scam prevention regulations as “unworkable”, citing high implementation costs and technical barriers. This challenge is outlined in the Australian Financial Review.

Advocate’s View:
“Scammers must be stopped at every step of their game, on every service across the economy they exploit, and we welcome the Government’s efforts to prevent these relentless criminals robbing Australians of hard-earned savings.”Sunita Bose, Managing Director, DIGI.

The Scams Prevention Framework Bill 2024 is a step in the right direction—but it doesn’t close the loop on consumer protections. Without a clear mandate for victim reimbursement, scam victims remain financially exposed.

The government now faces a critical decision: will it strengthen consumer protections, or will Australians remain an easy target for scammers?

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