Australians hit by scams relating to banks, telecommunications companies and digital platforms will finally have someone to help them after the federal government expanded the remit of the Australian Financial Complaints Authority (AFCA) to handle scam complaints.

The designation, which is the latest in a series of measures stemming from the introduction of the Scams Prevention Framework (SPF) earlier this year, will see AFCA become a one-stop stop for consumers whose efforts to directly resolve scam complaints have failed.

The change was first mooted in late 2024.

Banks, telcos and digital platforms must become AFCA members from 1 September, bringing them in line with a range of AFCA processes including binding obligations around external dispute resolution (EDR).

It will give consumers an avenue for redress that bodies like the Telecommunications Industry Ombudsman (TIO) – which fields over 50 complaints per month about digital services platforms from frustrated customers – haven’t been able to handle.

“We have significant experience handling complex complaints at scale, and we’ll be using that experience to build an effective and accessible service” to help scam victims, AFCA acting CEO and chief ombudsman Dr June Smith said as the announcement was made.

AFCA resolved 10,400 scam-related complaints during fiscal 2023-24, taking an average of 57 days – and while “we recognise the size of the task,” Smith said, “we look forward to working closely with all stakeholders to deliver a robust, fair and efficient dispute resolution process.”

Building a stronger scam response

The fact the SPF will span a broad range of consumer-facing industries will simplify scam resolution, Minister for Financial Services Dr Daniel Mulino said, by providing “an alternative dispute resolution pathway to costly and time-consuming legal processes.”

The SPF will override other applicable frameworks, he added, ensuring that consumers have access to “a clear framework to support consistent and transparent AFCA determinations.”

Leading the response will be David Lacey, who has been appointed as the first chief scams officer (CSO) and will build an EDR scheme to address scams that, he said, “are increasingly sophisticated and leave people facing devastating financial and emotional consequences.”

Emboldened by the power of generative AI (genAI) platforms, scammers have ramped up their work – particularly in the runup to the FIFA World Cup tournament, with FortiGuard Labs recently reporting 8.8% of 13,000 new World Cup related domains are malicious.

During the first quarter of this year the National Anti-Scam Centre took down 5,834 scam websites – including 1,960 fake online gambling sites – and referred 511 ads, profiles and groups to Meta for investigation.

Australians lost $94.5 million through 61,400 reported scams in the first four months of this year alone, according to the ACCC’s ScamWatch service – with investment scams far and away the most common vector for losses.

Streamlined reimbursement for victims?

The ongoing presence of scams on digital services has been a bugbear for consumer protection authorities, with the digital giants offering plenty of options to report scams but little clear guidance around resolution or redress for losses in which they are complicit.

Significantly, the draft SPF measures include a contentious proposal that scam victims could get automatic payouts of up to $3,000 once they have verified they were compromised by a scam.

It’s an improvement from previous “undercooked“ SPF models that did not mandate reimbursement to scam victims, but falls short of the more generous scheme introduced in the UK in late 2024, which provides for up to $162,000 (£85,000) in compensation.

The new SPF also enables AFCA to split liability for a scam across multiple banks or other organisations – a significant feature that should further incentivise businesses to fight scammers that often move funds quickly between organisations.

“Scams are one of the most significant issues affecting consumers today,” Lacey said, and “we recognise the complex nature of modern scams and the need for fair outcomes for victims and the organisations involved.”

The new ‘Stage 1’ SPF measures – which designate which entities will be regulated, propose common obligations and specific obligations for banks and digital platforms, and how dispute resolution could work – are open for consultation until 25 June.