The head of Australia’s consumer watchdog, Rod Sims, says that disruptive digital technologies are making it more difficult to prevent consumers being defrauded.
“New technology has increased access to more products, services, and information for consumers, but with it come new challenges for consumer advocates and regulators,” said Sims, chairman of the Australian Competition and Consumer Commission (ACCC).
Speaking at the ACCC’s annual National Consumer Congress in Melbourne, Sims warned of consumers being affected by “fast moving, disruptive technologies or by anti-competitive responses to those technologies by incumbent businesses.”
He highlighted the challenges in regulating “rogue online traders, sophisticated scam artists, and new retail practices like ‘subscription traps’, some of which fall short of the Australian Consumer Law and many of whom are based overseas.
“Consumer advocacy is essential to ensuring all consumers reap the benefits of a well-functioning market economy and ensuring that consumer protection moves with the times,” he said.
He added that the ACCC would be paying more attention to deceptive advertising of broadband speeds. “Consumers are calling for standardised information to help them make informed comparisons between the different speeds available on the market.
“To address this, we have published six principles to help ensure internet service providers’ claims about broadband speeds aren’t misleading under the Australian Consumer Law. We will also publish a best-practice broadband speeds advertising guide for providers.”
The ACCC congress was held to coincide with World Consumer Rights Day, which this year had the theme of ‘building a digital world that consumers can trust’. To mark the event, the German Government convened a G20 Consumer Summit in Berlin, held in conjunction with Consumers International and the Federation of German Consumer Organisations.
Consumer protection in the digital age is a big part of the ACCC’s activities. It has held seminars on cybercrime and identity theft and has been running its ‘Scamwatch’ website, which mainly targets online consumer fraud, for nearly ten years now.
Scamwatch has been particularly active in uncovering online dating frauds and phishing scams (fraudulent emails).
Its website lists several common types of scams, all of them commonly propagated online:
- Offers of money – to get personal information or to lure people into sending money for ‘expenses’
- Lottery and competition winnings
- Fake charities
- Dating and romance
- Illegitimate transactions, often selling non-existent products or services;
- Various attempts to gain personal information
- Threats and extortion.
Scamwatch has an interactive graph which shows how much is lost by Australians to scams, by month, by gender (males are more gullible), and by age (the older you are, the more likely you are to be taken in).
There is also a breakdown by delivery method. Telephone remains the most common method, but all online techniques combined – email, Internet, mobile apps, text messages – outweigh the phone and comprise over half of all scams.
In 2016 the amount lost in Australia to scams reported to Scamwatch amounted to more than $83 million. The figure in 2015 was very similar. And that is only the reported scams– the consensus is that unreported fraud is much more common.
In his address to the National Consumer Congress Mr Sims said that the ACCC would be moving beyond the traditional areas of consumer guarantees towards more complex products such as motor vehicles and the provision of services in industries such as telecommunications and airline travel.
Mr Sims said that even after five years at the head of the ACCC Chair, he remains puzzled as to why some large companies treat their customers so badly and with so little respect.
“We are often told that companies will only succeed by meeting customer needs. It is clear that some companies seek to deceive their consumers about these needs.
“This is why we take on so many high profile cases, to act as a deterrent to others by showing that those who seek to mislead or mistreat their customers will be held to account.”