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The Australian Competition and Consumer Commission (ACCC) has demanded severe penalties linked to violations of new regulations, stating digital platforms have a vital role in stopping scams.
Online platforms, according to ACCC Chair Gina Cass-Gottlieb, are in a “unique position” to block or uncover scams and remove risk-prone applications as the frequency of scams increases. The digital platforms, according to her, “need to do more to stop their users from being scammed”.
Between 2020 and 2021, Scamwatch recorded over $144 million in losses from mobile apps, social media, and online scams. Considering that just 13% of victims disclose their losses to Scamwatch, the ACCC estimates that actual losses are “substantially higher”.
The consumer watchdog published its fourth report, making recommendations for new legislation to manage reporting as well as dealing with scams, fraudulent reviews, and unsafe apps.
“Our analysis has identified concerning consumer and competition harms across a range of digital platform services that are widespread, entrenched, and systemic,” Cass-Gottlieb said. “The critical positions that digital platforms hold, as ‘gatekeepers’ or ‘intermediaries’ between businesses and consumers, mean they have a broad influence across the economy, making the reforms we are recommending crucial and necessary for all Australians.”
The watchdog is worried about the damage caused by false reviews on websites like Google, Amazon, and Facebook which the study claims have substantial consequences for affected businesses”. Additionally, fraudulent applications are still a concern.
Cass-Gottlieb stated that “these problems have been made worse by a lack of avenues for dispute resolution for consumers and small businesses, who often simply give up on seeking redress because they cannot get the digital platforms to properly consider the problem.”
The report stated that penalties for breaking the new code “at a minimum” match those under the present Competition and Consumer Act.
The maximum penalty at the moment is $10M which is three times the profit gained by the violation, or 10% of yearly Australian turnover for the month the severe breach occurred.
The watchdog stated that in order to implement any recommendations made in the report, either new law or a modification to current legislation would be required.
Treasurer Jim Chalmers stated that the govt was considering the suggestions. Before implementing any reforms, the govt will have a public consultation including representatives of the industry.
Suggested Read: Bank of Ireland Warns Customers of Rise in Phone Call and Text Scams