Banks and tech giants that fail to prevent victims losing money to scams could face $50 million fines proposed laws to protect Australian consumers.

The Albanese government is expected to announce draft legislation on Friday that would force banks and other industries to prevent scams.

The ABC reports that companies would be required to prevent, detect and disrupt scams, plus respond to and report the crimes.

More victims may be able to receive compensation under the changes, the government says.

“We want to ensure that the best protections anywhere in the world are available,” Financial Services minister Stephen Jones told the ABC.

Jones said that not only banks would be held responsible for people losing money. Tech giants such as Google, TikTok and Facebook would be held to account for scams on their platforms, and fined up to 5 per cent of their revenue.

“I’m not going to let the social media platforms off the hook,” Jones said.

“If they’re taking money to advertise scam content and somebody loses money as a result of that, then there has to be a consequence.”

That step prompted X owner Elon Musk to take aim on Friday morning, labelled the Albanese government “facists”.

Fascists https://t.co/NQcR9justJ

— Elon Musk (@elonmusk) September 12, 2024

‘Plague of our times’

Banks have warned that online financial scams have become the “plague of our times”.

Major lenders say they are devoting more resources to combating scams, as more people lose their life savings.

In a two-day federal parliamentary hearing last month, NAB chief executive Andrew Irvine said more than $100 million in payments to scammers had been disrupted between March 2023 and June 2024.

“This is the plague of our times,” he said.

“Banks, telcos and, in particular, social and digital media companies, need to do more to play their part to stop scams happening before they reach customers.”

ANZ boss Shayne Elliott said almost a third of all financial scams dealt with by the bank stemmed from Facebook.

“The sophistication of these scammers is increasing every single day and with the advent of new technology like generative AI, [it] has given them yet another tool to exploit,” he said.

“All of us, if we haven’t been scammed or experienced a scam, we all know somebody who has, so it’s a blight on the entire community.”

Commonwealth Bank chief executive Matt Comyn said it had an increasing number of staff dealing with financial scam prevention.

“We have over 4000 people working full time across these areas and it is now one of the largest areas of operational activity within the Commonwealth Bank,” he said.

“We were able to cut scam losses to customers by more than 50 per cent in the last financial year.”

Comyn also repeated calls for banks and other companies on the frontline to do more to prevent customers losing money to scammers.

He used his appearance at the inquiry to urge those companies to be part of liability schemes in which customer funds would be reimbursed if protection obligations were not met.

“This liability scheme should be simple, efficient and fair for customers with a single front door to access and resolve disputes across scams, fraud, cyber security and financial crime prevention,” he said.

“The challenge now is to continue to drive [scams] down.

“It is simply not possible for the banks alone to limit scam losses across the community.”

Westpac boss Peter King said investment scams made up about half of all customer losses.

“Too often, Australians are getting their investment advice from ads they’re finding online including on Meta (Facebook’s parent company) platforms,” he said.

“Digital platforms and social media companies are still missing in action when it comes to the fight against scams.”

-with AAP