ASIC to take further action to reduce scams on SMEs and consumers

The Australian Securities and Investments Commission (ASIC) chair Joe Longo has promised to take further enforcement action to protect consumers and small businesses from scams.

Releasing ASIC’s latest Corporate Plan, chair Joe Longo said the plan follows a “year of progress” against the organisation’s strategic priorities and strong enforcement outcomes in 2022-23.

In the plan, Longo acknowledged the challenges Australians have faced over the past 12 months due to inflation and high interest rates.

“Against this backdrop, we will sharpen our focus on predatory lending practices and non-compliance with new consumer protections relating to small amount credit contracts and consumer leases,” he said.

“We will also take action against conduct that unfairly impacts small businesses, including in relation to unfair contract terms and supply of unsuitable products.”

Longo said ASIC has made strong progress since it released its strategic priorities last year, but it still has “more work to do”.

“We are responding to key trends and emerging issues in the regulatory landscape, where there are major shifts across sustainable finance, the digital and data economy, and an ageing population,” he said,

“We are also closely monitoring the development and use of artificial intelligence and what this means for the businesses and markets we regulate and exploring potential uses of this and other technologies within ASIC.”

Longo said ASIC’s new structure, “strengthens our capacity to respond to emerging threats and challenges. A key priority for me is to ensure the structure better supports the prioritisation of enforcement and regulatory issues, quicker decision making, and operational flexibility.”

Over the three years to 30 June 2023, ASIC said it commenced over 125 criminal actions, resulting in 92 criminal convictions and 39 custodial sentences.

In the same period, it commenced close to 200 civil actions, resulting in over 130 successful civil claims. More than $500 million in criminal and civil penalties were also imposed by the courts.

“Protecting consumers and small businesses from misconduct and taking decisive action against those who break the law is central to ASIC’s work to maintain confidence in Australia’s markets and support the economy,” Longo added.

Another focus for ASIC is scams involving cryptoassets and the harms these products pose more generally for investors.

“We will act where misconduct falls within our regulatory remit, while supporting the development of whole-of-government policy initiatives,” Longo said.

“Elsewhere, we will work to combat digitally enabled misconduct through active supervision of regulated entities to ensure robust cyber resilience and risk management practices are in place.”

The regulator is also closely monitoring the development and application of artificial intelligence.

ASIC highlighted one of its key priorities is to better understand the threats and opportunities for regulated entities and markets.

“All participants in the financial system – including regulators – have a duty to balance innovation with the responsible and ethical use of emerging technologies,” Longo said.

“In the year ahead, we will explore the potential uses of artificial intelligence and other technologies by ASIC as a leading digitally enabled, data-informed regulator.”