Banks and social media platforms could be forced to cough up cash as part of an Australian-first compensation scheme for scam victims.
The federal government is pumping $15 million into a re-dress pathway for Australians who have lost money in scams and have been unable to resolve the issue.
Scam victims will be able to seek financial compensation through a “single door” via the Australian Financial Complaints Authority (AFCA), even if the complaint is made against regulated industries.
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It will mean platforms such as Facebook or Instagram and banks could be liable if they failed to put adequate safeguards in place to prevent scams.
The federal government said redress from social media companies for victims is currently “close to impossible”.
“Our scams crackdown will cut off the avenues scammers use to target Australians by setting a high bar for what businesses must do to prevent them,” Assistant Treasurer and Minister for Financial Services Stephen Jones said.
“Scam victims will have a clear pathway for redress.”
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He added: “We want victims of scams to know the government has their backs, and we want businesses to understand that they have a responsibility to protect Australians from these often devastating scammers.”
The AFCA said it received more than 100,000 complaints every year about financial firms, and about 11,000 of them are scam-related.
Today’s funding announcement is part of the government’s landmark Scams Prevention Framework legislation.
Scams which took place via social media cost Australians $93.5 million in 2023.
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