The Insurance Council of Australia (ICA) has presented its perspective on the Scams Prevention Framework Bill 2024 (SPF Bill) during a Senate Economics Legislation Committee inquiry.
The bill aims to introduce mandatory obligations for specific industries to detect, report, and prevent scams.
The ICA emphasised the need for a carefully phased implementation that reflects the unique nature of the insurance industry. It said that collaboration among government, regulators, and businesses is essential to combat scams effectively.
While scams targeting insurance companies and their customers are less frequent than in sectors such as banking, the industry remains exposed to risks.
The ICA cited phishing attempts, fake insurer websites, and fraudulent requests for payments to expedite claims as common threats. Additionally, customers often face heightened risk following natural disasters, as urgency to settle claims can make them more susceptible to fraud.
In response, the ICA established a counter fraud and scams unit in 2024 to enhance detection of organised fraud networks and emerging scam trends. The initiative is part of the broader effort to safeguard consumers and improve industry-wide capabilities.
The ICA made several recommendations to clarify the SPF Bill’s scope and ensure it aligns with existing regulatory frameworks, including the Financial Accountability Regime (FAR). It also called for a principles-based approach to ensure flexibility and scalability across different sectors.
Key points raised by the ICA include:
The ICA also emphasised the importance of scam intelligence sharing across industries and supported consultation with stakeholders to ensure the bill’s effective integration into the insurance sector, if designated.
The ICA’s input comes amid rising concern over evolving scam tactics across industries. Separately, NAB has identified key scam trends expected in 2025, including those using artificial intelligence (AI) and cryptocurrency schemes.
Chris Sheehan, NAB’s group investigations executive, described how criminals are leveraging AI to create deepfake videos and audio that mimic individuals, including high-profile Australians.
“Three seconds of audio from a video or a voicemail or an image from social media is enough for criminals to get to work,” he said.
NAB has implemented strategies to address these threats, such as:
Despite an 18% rise in scam reports, NAB reported a 20% reduction in customer financial losses year-on-year, attributed to these measures.
