Government’s scams solution driven by banks, confusing for consumers, weakens telco consumer safeguards

While the TIO supports strong action to disrupt scams and protect consumers, the submission raises concerns about the Government’s proposed solution:  

• Unclear dispute resolution and reimbursement: The draft doesn’t clearly explain how scam complaints will be resolved or how scam victims will be reimbursed for their losses, creating confusion, uncertainty and delay for consumers needing help.
• Rushed consultation: There hasn’t been enough time to test and understand how the new policies will affect consumers.
• Risk to telco consumer protections:  The approach will weaken the telco sector’s ability to understand and address consumer issues, which is essential for protecting consumers and maintaining trust.

The TIO recommends having one main access point for consumers to access external dispute resolution (EDR), while also ensuring the SPF supports a strong multi-EDR scheme model. This makes it easy for consumers to make a complaint and lets organisations handle the complex details to ensure fair outcomes.  

Comments attributable to Ombudsman Cynthia Gebert:

“This Exposure Draft and Explanatory Materials is a solution driven by the concerns of banks rather than consumers. It does not provide any certainty for consumers that they will be reimbursed for their scam loss, nor clear apportionment of responsibility across banking, telco and the digital platforms sectors. This lack of clarity could stop many consumers recovering their losses or severely delay it, adding stress and harm to consumers already suffering as a result of scams.

“The draft scams framework erodes consumer understanding of where to take issues involving their telco that fall outside of scams. It erodes the ability of regulators to enforce telco breaches, a critical part of the consumer protections framework that contributes to building trust and confidence in the telco sector.

“Our proposal for a multi-scheme approach to tackling scams means the heavy lifting is done in the background by the Ombudsman services. We work together to get the outcome for the consumer. This model reduces costs on EDR schemes and industry. It ensures a simple and easy process for consumers to make complaints and achieve truly fair and reasonable outcomes. And it will be quicker and easier to implement than requiring telcos to join another scheme.

“We are concerned about the lack of consultation with the telecommunications sector. For the SPF to make a real difference, it must put people at the heart of the solution. Putting people at the periphery of the solution damages established consumer safeguards and erodes trust and confidence. We need to work together so people don’t fall between the cracks.”

ENDS

Notes to Editors

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