Consumer watchdog outlines tougher online scam safeguards

Digital platforms need stronger safeguards to combat scams and should be subject to mandatory dispute resolution processes, Australia’s consumer watchdog says.

Nov 11, 2022, updated Nov 11, 2022
ACCC Chair Gina Cass-Gottlieb speaks to media. (AAP Image/Bianca De Marchi)

ACCC Chair Gina Cass-Gottlieb speaks to media. (AAP Image/Bianca De Marchi)

Noting reported losses from scams skyrocketed from $49 million to $92 million from 2020 to 2021, the Australian Competition and Consumer Commission said it was clear platforms must do more to stop other users falling into similar traps.

It wants new laws that make businesses such as advertisers and app developers require verification, as well as other verification practices to ensure reviews are reliable, and a strong dispute resolution process.

The ACCC also noted a competition problem in the digital space and said regulation was needed to stop things such as platforms preferencing their own services and compelling users onto certain products.

They say new laws are needed to address anti-competitive conduct, bad treatment of business users and barriers to entry for potential rivals.

ACCC chair Gina Cass-Gottlieb called for new digital platform codes of conduct.

“This would ensure the obligations are appropriately targeted to particular competition issues present in specified digital platform services, allow consultation with stakeholders and provide the flexibility to address emerging and new forms of harmful conduct,” she said.

Cass-Gottlieb said digital platforms had a responsibility to do more in their “unique position” as an intermediary between scammers and victims.

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“We also need more action on fake reviews from platforms whose services feature ratings and reviews, including those appearing on search, social media, app stores and online marketplaces,” she said.

“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 government welcomed the release and said it would continue to monitor the inquiry’s progress, with the final report not due until 2025.

“The government is considering the ACCC’s recommendations and will consult publicly to seek the views of stakeholders as part of its efforts to ensure Australia has the right regulations in place to be a leading digital economy,” it said in a statement.

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