Minister for Financial Services Stephen Jones says the project to make financial advice more affordable and accessible is partly motivated by a desire to protect consumers against scams.
Australians lost $2.74 billion to scam activity last year, according to official Treasury figures, of which half was attributed to “investment scams” falsely purporting to be offering financial products, advice or services.
In a speech to the National Press Club in Canberra on Wednesday, Jones said the Albanese government was making the “war on scams” a priority ahead of the next federal election and praised the work of the newly created National Anti-Scam Centre, which was funded by a $58 million allocation in the last federal budget.
The centre’s initial “fusion cells” had helped achieve a 29 per cent decline in investment scam losses in the second half of 2023, Jones said. The result provided evidence, he said, for a government-led solution to scams rather than focus solely on consumer education and personal responsibility.
“It was really convenient for governments and institutions to hide behind this description of a scam [victim] as a mug who was silly enough to be taken for a ride,” he said. “It’s a simplistic and outdated view.”
The comments came just days after an exclusive interview with Professional Planner in which the minister revealed that he believed the government’s work on reforming financial advice and its efforts to combat scam activity were inextricably entwined.
“I’m deeply concerned that Australians are seen by international criminal outfits as wealthy, connected [but] not always sophisticated in their financial decisions and choices and therefore a target,” Jones said, in the first episode of the new season of the Professional Planner Shape of Advice podcast.
“I don’t necessarily agree with all of that, but criminal gangs them see them as that. They have been industrialised over the past three or four years.
“We need to have some safe doors for people to walk through. They’re not all going to be perfect, but they’ve got to be safe.”
New and more accessible forms of simple financial advice, which could be provided by banks, super funds, insurers, professional advice firms or others following implementation of the Delivering Better Financial Outcomes project, would be an example of a “safe door” through which consumers could seek answers to basic questions around inheritances, investing or personal finance, Jones said.
“There are not enough places for that person to go to seek a pretty simple answer to a pretty simple question,” he said.
“ [Australians] are falling victims by their thousands to scammers because of that.”
The minister added: “This is not about superannuation funds or banks or even – as much as I love them – professional advisers. It’s about consumers.”
Meta missive
The minister also used his Press Club address to announce that Australia would diverge from the UK’s approach to combating scams by demanding that accountability, including compensation for victims, would not be confined to banks or the finance sector.
Instead, the Albanese government would ensure that social media and telecommunications companies were also included in a national scheme to tackle scams, he said.
“Banks and financial institutions need to strengthen the protections they have in place [but] overwhelmingly scammers contact their victims through their communications network and via social media platforms,” Jones said.
“Telcos, social media, they’ve got an important job to play, to cut off the means of communication and publication that the criminals are using.”
Jones took aim squarely at Silicon Valley-based social media giants such as Meta (owner of Facebook and Instagram).
“I frankly think it’s a big problem that [they] let scammers use their networks to target victims,” he said.
“I actually find it offensive that they make money from scam ads on their platform while victims are losing money.”
However, after coming under fire from federal press gallery journalists who argued the big four banks should be held most accountable for scams, Jones made clear that “banks are not off the hook”.
He added, though, that not all financial institutions have the scale of a Westpac, whose CEO Peter King was in the audience, saying it was unfair that a small financial institution such as the “Broken Hill Credit Union” should be held responsible for scams, while multinational technology giants who published and profited from the scams were not.
“Digital platforms have got a moral obligation to join the fight,” he said.
