Buoyed by early success in blocking scam phone calls, Australia’s telecommunications regulator now also requires mobile carriers to block SMS scams – but with financial losses continuing to surge, the ACCC admits “more needs to be done” to keep up with scammers.

The new rules, contained in ACMA regulation C661:2022 and now part of ACMA’s formal register of telco industry codes and standards, introduce a “more uniform, collaborative and efficient approach to identifying, tracing, and blocking scam calls and scam SMS,” the agency said.

Australian telcos must “make best efforts to identify, trace, block and otherwise disrupt scam calls and scam SMS” messages, the new rules mandate, noting tell-tale signs of scams including blocked or invalid caller line identification (CLI) numbers, calls that don’t present call-back details to the destination network, and CLIs that don’t correspond to the range allocated to a particular carrier.

Telcos are expected to work together – and with government agencies – to share information about scam calls and messages, and must not carry any calls that don’t include standards-compliant CLI information.

They are also required to provide consumer information about scam calls and SMS messages, including the risks that consumers can take in mitigating risks from such scams.

“SMS scams can be highly sophisticated and have devastating financial and emotional impacts for victims,” ACMA chair Nerida O’Loughlin said, calling scam messages “deeply frustrating to Australians because they are received on devices that are an essential part of our social and economic lives.”

The new rules replace the previous Reducing Scam Calls Code, which was introduced in 2020 and led to the blocking of more than 549 million scam phone calls in its first 16 months of operation – including over 232 million calls by Optus alone.

ACCC ScamWatch figures suggest that tighter enforcement has reduced overall volumes of scam calls by half – from 144,601 last year to just 33,403 for the first half of this year – yet financial losses are increasing dramatically.

Australians reported losing $100 million to phone scammers last year, up from $32.3 million in 2019 – just before the Reducing Scam Calls Code was introduced.

ScamWatch has also received 32,700 reports of SMS-delivered scams in the first half of this year alone, with reported losses of $9.1 million.

That’s nearly as much as the $10 million lost to SMS scammers during the whole of 2021 – in which Australians lost more than $2 billion to scammers overall.

“Almost every Australian adult and business is affected,” O’Loughlin said. “We shouldn’t have to screen messages and adopt workaround behaviours to be able to feel safe and stay connected.”

Fighting the numbers game

The new rules – which threaten penalties of up to $250,000 for non-compliant telcos – come a decade after the ACCC joined the Telecommunications Industry Ombudsman (TIO) to crack down on surging SIM swapping and other mobile-related scams.

Newer filtering technologies have helped telcos tighten the screws substantially in recent years: Telstra, for one, turned on its SMS scam filter in April and this month reported it has since blocked over 185 million malicious text messages, equivalent to more than 2 million such messages per month.

Optus, which turned on an ‘SMS firewall’ in 2019 and the next year began using machine learning to improve its accuracy, says it now blocks an average of 10 million malicious text messages per month.

Similar efforts worldwide are slashing the number of fraudulent messages that get through: a Vodafone UK SMS firewall has been credited with cutting the volume of fraudulent SMS messages by 76 per cent in six months, while Optus cites a 95 per cent reduction in reported mobile fraud across the industry.

“Consumers will benefit from peace of mind that they can trust the calls and SMS they are receiving,” the code notes, “avoiding the frustration of the intrusion of these scams and ultimately avoid the emotional and/or financial impacts of falling victim to scams calls or scam SMS.”

Despite reducing scam call volumes, however, surging financial losses suggest that scammers are getting better than ever at extracting money from unwitting victims – underscoring the importance of consumer educational campaigns also required by the new code.

Even with telco filtering in place, consumers must remain wary: the code only applies to messages carried directly over a telecommunications carriage service – meaning that it does not cover WhatsApp, Facebook Messenger, iMessage, Telegram, or any other ‘over-the-top’ data messaging service.

The ACCC recognised the ongoing challenges to the sector in its recent Targeting Scams report, in which ACCC deputy chair Delia Rickard warned that despite cutting the volume of phone scams by half, “SMS scams have filled the gap…. More needs to be done.”

“It is only through our combined efforts that we can make a real difference to this enduring problem,” she continued. “By sharing information, collaborating to increase awareness of scams, innovating to disrupt scammers and fixing the systems or processes to exploit, we can make Australia a harder target for scammers.”