EDITORIAL: Australian laws must catch up to stop online scams

You know David Koch. You likely trust David Koch.

That’s trust that has been hard-won, through decades of work bringing Australians the news and credible financial analysis, on Seven’s Sunrise and through his books and newspaper columns.

But it’s trust that is being exploited by unscrupulous online scammers, looking to relieve Australians of their life savings.

In his column for today’s The Nightly, Koch writes of the heartbreaking example of an elderly woman who lost $100,000 to these fraudsters.

She had been lured into the scam by a fake endorsement from Koch.

She figured that — coupled with the fact that the ad had appeared to her through her Bible app — meant it was trustworthy.

The worst thing about her story is that it is far from unique.

Aussies fall victim to these cyber scams — often run out of overseas fraud sweatshops — every day.

And they’re not all little old ladies whose technological naivete makes them easy targets.

These scams are becoming so sophisticated that even digital natives are at risk. According to the Australian Tax Office, those aged 25 to 34 lose the most money to tax scams, followed by those aged 18 to 24.

Then there are email spoofing scams, in which the crims intercept emails from legitimate businesses and send false invoices for real services. There are banking scams, SMS scams, and scam phone calls from those claiming to be collecting alleged debts.

Things have come a long way from mass emails from Nigerian princes and fake oil sheikhs.

These are elaborate schemes from sophisticated organised crime outfits.

And like other organised crime syndicates, they know and understand the laws of the countries in which they operate.

Our lax legislation is what makes Australians such appealing targets.

Last year the UK Parliament passed legislation that made banks and other payment providers legally liable to reimburse their customers for losses to scams. Here in Australia, don’t expect much from your bank other than sympathy if you find yourself trying to recoup a payment made to a scammer.

Too often, it’s a case of too bad, so sad.

Making banks liable for scam losses is the best and most practical solution to our fraud epidemic.

Unfortunately, due to the international nature of these operations, holding the scammers themselves to account can be tricky. Australian police don’t hold much authority in a Hyderabad call centre.

Banks, however, have the resources—both financial and technological — to do much more to prevent fraud.

Making them liable for losses made through their platforms is a powerful incentive to protect their customers as best as possible.

There’s also scope for Australia to follow the UK’s lead in other anti-fraud measures, such as the adoption of an online fraud code by tech companies.

Our laws must urgently catch up before more Australians lose it all.

Responsibility for the editorial comment is taken by The Nightly Editor-in-Chief Anthony De Ceglie.