The Australian Communications and Media Authority (ACMA) made a move to create a new determination governing existing customer identity authentication. However, this has caused concerns that co-regulation may be undermined.

Comms Alliance chief executive John Stanton said that: “Industry was surprised when the ACMA decided – in the middle of the mandatory public comment period for the Existing Customer Authentication industry code – that the regulator would begin a consultation on a potential service provider direction that would cover the same ground as the code.”

“It is an unprecedented move, so far as I’m aware, and creates a parallel, duplicative regulatory processes,” Stanton added.

“The regulator and industry share a common and important objective here – to ensure that customers are protected from unauthorised transactions and the financial and emotional damage they can cause.”

“The ACMA considers that there continues to be a place for both co-regulation and direct regulation for the telco industry,” the spokesperson further added.

“Whether one type of regulation is preferable to another will depend on a range of factors, including the nature of the problem the regulation is aimed at addressing and the actual or risk of harm to consumers.”

According to the spokesperson, the priority of ACMA “is to implement the most effective solution to address the considerable consumer detriment being experienced.” They also added that “Unlike an industry code, which is voluntary until a company is directed to comply, a service provider determination will place mandatory and immediately enforceable obligations on all carriage service providers.”

The spokesperson said that “There is strong evidence that the introduction of the PPV Standard, which has been in force since April 2020, has led to a significant reduction in fraudulent mobile number ports. Unfortunately, there is also clear evidence that scammers are targeting other customer interactions with telco providers, such as SIM swaps, to facilitate identity and financial theft. We estimate the average loss per mobile number fraud to be over $28,000.”

According to the ACMA spokesperson, the regulator will think about whether the industry-developed code submitted for potential registration “provides appropriate community safeguards and has met mandatory requirements under the Telecommunications Act 1997 in due course.”

Stanton said that “the strengths of a code-based approach include that it can avoid providing a ‘how to’ guide to criminals, by keeping information about specific anti-fraud steps contained within a non-public industry guideline.”

“The code is also designed to give service providers the flexibility to prevent vulnerable or disadvantaged customers, including those in emergency situations, being further disadvantaged.”

The chief executive further said that: “We are digesting the content of the draft direction. We will make a submission to the process and further engage with the regulator.”