Additionally, social media platforms will be required to report scams to the Australian Financial Complaints Authority (AFCA), which oversees banks and can mandate refunds.

The reforms will empower the Australian Competition and Consumer Commission (ACCC) to compel companies to refund customers who lose money to scams, which cost households at least $2.7 billion annually.

Consumer advocacy groups have welcomed the proposed measures, advocating for a reimbursement model similar to the UK's to streamline compensation for victims.

Banks will be mandated to alert customers of potentially scam-related financial transfers, while telecommunications companies must promptly address scam text messages.

New regulations will require phone companies to screen known scam numbers and content, while social media platforms must take action to prevent the distribution of scams.

The Australian federal government is proposing new legislation aimed at holding companies accountable for preventing scams, particularly as fraudsters increasingly exploit advanced technologies like generative AI.

Under the proposed measures, banks, social media companies, and telecommunications firms could face fines of up to $50 million if they fail to protect consumers from scams.

If enacted, the laws will require high-risk sectors to implement codes mandating scam prevention measures and establishing internal dispute resolution systems for affected customers.

This initiative is part of a broader strategy by the government to combat the rising prevalence of scams targeting Australians, as evidenced by the significant losses reported.

In 2023 alone, Australians reported 601,000 scams, underscoring the urgent need for stricter regulations to protect consumers.

Members of the public have the opportunity to provide feedback on the draft legislation until early October, allowing for community input on these critical reforms.

The Australian Banking Association has expressed support for the draft legislation, highlighting the necessity of collective efforts among all stakeholders to effectively combat scams.