Announcement Date
3 December 2024
Link to Announcement
Better protections for Australians from SMS scams | Ministers for the Department of Infrastructure
Problem Being Addressed
Scams affect all sectors of the community. In 2023, the Commonwealth Government service Scamwatch received over 8,000 reports of investment scams with total reported losses of $292 million.
This Impact Analysis (IA) examines how best to implement a Short Message Service (SMS) Sender Identification (ID) Register (the Register) as part of the Government’s suite of initiatives to combat scams and to protect Australians from financial harm. The Register aims to protect consumers and brands by disrupting SMS impersonation scams where scammers send SMS with alphanumeric sender identifications (IDs) to imitate well-known brands such as banks, government agencies or retailers in order to deceive victims, to steal their money or personal information.
Proposal
Under the Telecommunications Amendment (SMS Sender ID Register) Act 2024, which will commence no later than 6 March 2025, the Australian Communications and Media Authority (ACMA) must establish the Register “as soon as practical” after the Act commences. The IA considers three options for implementing the Register.
- Option 1: Status quo. Under this option ACMA would continue to monitor and enforce the existing Reducing Scam Calls and Scam SMs Code 2022 industry code requiring telecommunications providers to identify and block scam calls and SMS. SMS messages with sender IDs would continue to be subject to impersonation by scammers, causing ongoing harm to consumers and to the reputation of retail brands and government entities.
- Option 2: Voluntary registration of sender IDs. Under this option, entities would be able to register SMS alphanumeric sender IDs on a voluntary basis. If the sender ID is registered but the sender is not the registered party, the SMS would be either blocked or tagged as a possible scam. Under this model, a separate ‘blocklist’ could be maintained, where variations of registered sender IDs (e.g. Auspost instead of AusPost) are also blocked. Unregistered sender IDs would not be blocked or tagged, and could still be used for scams.
- Option 3: Mandatory registration of sender IDs. Under this option, all brands and entities wishing to send SMS with alphanumeric sender IDs would be required to register these as sender IDs. Unregistered sender IDs would either be blocked or tagged as a possible scam. Telecommunications providers involved in sending SMS with alphanumeric sender IDs would be subject to enforceable rules and prohibited from sending SMS with alphanumeric tags unless the tag is registered and the messages originate from a legitimate sender.
The IA estimates the benefits outweigh the costs for both mandatory registration and voluntary registration, with mandatory registration (Option 3) delivering a greater net benefit. Under the mandatory option, consumers are estimated to receive $192 million in benefits from avoided financial costs and avoided time spent resolving scams. Entities using sender ID receive $65 million in benefits from avoided costs of resolving impersonation scams. Mandatory registration also most effectively delivers on the policy objectives to safeguard consumers and entities against SMS sender ID impersonation scams by protecting the legitimacy of SMS sender IDs.
Assessed Impact Analysis Outcome
Good practice
Assessment Comments
The Office of Impact Analysis (OIA) assessment is that the quality of the IA is good practice. The IA addresses the seven IA questions and follows an appropriate policy development process commensurate with the significance of the problem and proposed intervention. The IA clearly articulates the rationale for government intervention, supported by robust analysis of the costs and benefits of the proposed government response and thorough coverage of the consultation that was undertaken to develop the recommended option.
Regulatory Burden
DITRDCA estimates implementing mandatory registration (Option 3) would increase regulatory costs to industry (eg registration and fees) by around $21.5 million per annum over the next 10 years.