Scams And Spams In Business: 3 Real-Based Examples In Australia And Government Law

The Australian Consumer Law

According to Howells and Weatherill (2017), there have been various consumer scams carried out in Australia through which large businesses had attempted to have in place fraudulent measures to make unethical profit at the cost of the consumer rights. Consumer rights are really important towards ensuring a stable economy for a country. Where the consumers of a nation feel safe and secure it not only signifies that the country has a string legal framework in place to provide them protection but also ensures that that economy of the country flourishes. In the present situation where several scams have been seen in the Australian market place with respect to consumers, the Australian legal framework has been subjected to criticism.  The government has formed the Australian Consumer Law under the provisions of the Australian Competition and Consumer Act 2010 (Cth). The Australian consumer law has been formed for the sole purpose of enhancing the protection to the consumers and ensuring that they feel safe when indulging in consumer related transactions (Browne, 2018).

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The primary purpose of this paper is to identify and discuss scams in the market place of Australia which have recently taken place to cause detriment to the consumers. The purpose of the paper is to also identify the law which is made by the government to address these situations.

Under the provisions of section 3 of the ACL provided through Schedule 2 of the Australian Competition and Consumer Act 2010 (Cth) a person is to be regarded as a consumer if he or she has indulged in the purchase of goods which are less than the value of $40000 and the goods have been purchased for the purpose of domestic and household purpose only. In addition vehicles which have been purchased for the purpose of transport services all fall under ACL. It is also provided by the section that such products should not be used for any form or resale or reproduction. There are various important sections which are provided by the ACL to ensure that the Australian consumers are products. Under the provisions of section 18 of the legislation a person who is carrying out trade and commerce activities is not allowed to indulge in an action which can be interpreted as being misleading or deceptive or a conduct which is likely to mislead or deceive.  Under section 20-21 of the Law it has been provided that a person must not indulge in unconscionable conduct as under common law with respect to goods or services.  Under section 23 of the ACL a person is not allowed to include in a contract any terms which can be considered as unfair terms under section 24 of the ACL. Under section 29-30 the law prohibits false and misleading representation in terms of goods and services and sale of land.  Provisions for offering of gifts, rebates and prizes are provided under section 32 of the Act. It has been provided by the section that a person should not offer in trade or commerce gifts, rebates and prizes if they do not have the intention of providing them in real. Under section 35, sellers are prohibited from indulging in bait advertisement. This means that they should not advertise in case, they reasonably believe that they would not be able to supply the product or services which have been advertised. It has been provided via section 36 that a person should not accept payment for goods and services in the course of trade and commerce of they do not have the intention of supplying such goods and services the consumer. Section 37 prohibits false or misleading representation about the profitability of business activities. Pyramid schemes are also prohibited through section 44 of the ACL.  The legislation also prohibits multiple pricing, referral selling, coercion and harassment under section 47, 49 and 50 respectively. One of the most important part of the legislation is that of consumer guarantees which are provided under section 51-63 of the legislations. These include right to title, quality, no misrepresentation, repairs, due skill and care, reasonable time of supply and fitness of the services for specified purpose. These guarantees cannot be excluded from a consumer contract under provisions of section 64. The breach of the warranties may lead to repair, refund, replacement and any consequential damages under section 260-261 of the Act. Under section 69 a person is prohibited from indulging into unsolicited consumer agreements. The legislation also sets out that breach of the provisions of the Ac may lead to pecuniary penalties and sanctions. 

Scams affecting Australian Consumers

According to (2018) this year almost $260,000 have been netted from Australian consumers due to phishing scams. The Australian Competition and Consumer Commission’s Scamwatch have received about 11000 reports in relations to such scams. In this kind of scam, the scammers use techniques through emails or phones for the purpose of tricking victims into providing them with valuable confidential information including bank accounts, credit card numbers, password and driver licence number. Most commonly these scams are reported to scamwatch by the consumers. The reports are 63% more than the other category of scams. The scam most commonly targets Australians who have the age of 65 or more.

For the purpose of brining to an end the issue of paper bills most of the organizations are moving online. Thus consumers in the present era are getting used to online communications from the government (Stewart, 2015).  As there are also legitimate surveys online which is offered by retailers actually offering gift cards and prizes it is becomes easy for the fraud surveys to be carried out in the market place by combining and using the names of genuine retailers. It has thus become very difficult if not impossible for the consumers to tell the difference between a real and a fake survey.  According to the news channel, one of the victims had provided her documents and credit card details to the center link office. She received an email after two weeks from mygov asking her to verify her identity. She thus provided all personal details. This is how the scam is carried out. According to (2018) phishing scammers seek a range of personal information for the purpose of putting together a complete image. They have access to different parcel of information of the same individual, which they put together to sell as a personality profile (Smh, 2018). The Australian government has created IDCARE as the only cyber and identity support service, which had been launched in the year 2014 to provide assistance to those who have been victims of identity theft for the purpose of personal details. The ACCC carries out strict survelliance in relation to such actions through their agencies ACCC scamwatch. The Government also educates the citizens in relation to how such conducts take place and how to avoid them (Stewart, 2015).

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This is a kind of scam in which scammers seek to take advantage of people who are looking for romantic partners. This scam is conducted via dating websites, social media or apps where the scammers represent themselves as being prospective companions. They trigger the emotions of the person to seek money and personal gifts. These scammers also telephone the victims as first introduction. The common name provided to this scam is Catfishing. In this form of scam the scammers typically create fake online profiles which are designed to lure the victim. They use fictional names and images of real people (Dating & romance, 2018). These scammers express strong emotions for the victims in a short time and ask to more the relationship to a more private mode such as instant messaging. They usually claim that they are from Australia or any western country. They go great length to gain the trust of the victims by sending gifts and sharing personal information. Once trust has been developed they ask from money and gift or the debit or credit card details of the victim. They also may ask for intimate pictures. They often pretend that they need money so a kind of personal emergency. They may include claiming that they have a loan which is to be paid immediately or they house will be confiscated and they would have nowhere to go. They may claim that their business has suffered financial losses suddenly and they are experiencing financial hardship (Corones, 2014). According to the Report of the ACCC on scams activity 2013, 25 million people in NSW alone reported a scam of $7.4 million (Edwards, 2015). The ACCC carries out strict surveillance in relation to such actions through their agencies ACCC scamwatch. The Government also educates the citizens in relation to how such conducts take place and how to avoid them.

Phishing Scams

In Australia the consumers are subjected to several scams in the market place. These scams include, advance fee schemes, Non-delivery and defective services and goods, unwanted and unsolicited services and goods and identity fraud. Schemes in relation to advance fee include, pyramid schemes, chain letters, ponzi schemes, business opportunity, lotteries and prizes and Nigerian emails. Non-delivery and defective services and goods, signify supplying goods or services of a lower quality than the quality for which the consumer is paid or not providing goods and services at all. These activities are carried out by online auctions, cable decryption kits, misleading credit and loan facilities, computer products and services and educational qualifications (, 2018).  Unwanted and unsolicited services include, persuading the consumers to purchase something which they really do not want to buy by the use of deceptive or oppressive marketing techniques. These activities are carried out by unsolicited advertisements, investment and securities fraud, inertia selling and bait advertisement. The scams which have been identified above can be carried out through activities such as door to door sales, mail orders and telemarketing internet sales. The subject matter can also have contracts in relation to buying and selling of motor vehicles, financial investment advice or purchase of products related to health care. In these frauds funds can be derived via all forms of payment options form the consumers such as cash, electronic funds, cheques and card transfers. In the case of ACCC v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405, the ACCC made an allegation that Coles supermarket had indulged in unconscionable conduct in 2011 while dealing with their suppliers. The court held that they had violated section 22 of the Act. In the case ACCC v April International Marketing Services Australia Pty Ltd (No 8) [2011] FCA 153 it had been stated by the court that the defendant organization had indulged in conduct which can be considered as cartel conduct having the effect of price fixing and had imposed bans and pecuniary penalties on the companies. Price fixing in Australia has been very prevalent in the past few years where the consumers have been forced to pay more price as the companies indulge in the misuse of market powers. There have been several such cases in Australia for example, ACCC v ANZ Ltd [2015] FCAFC 103 (31 July 2015) and ACCC v Australian Medical Association Western Australian Branch Inc [2003] FCA 686; (2003).


In conclusion it can be stated that although the government has in place strict laws to prevent scams in the market place, the scammers are finding new ways to defraud the citizens. The Australian consumer law sets out a strong framework for ensuring that the right of the consumer is protected in the country. In addition the ACCC takes all possible steps to ensure that the consumers are aware about their rights and are provided with the correct guidance in relation to avoiding the scams. The government through the ACCC takes strong actions as highlighted by the examples and cases discussed above with respect to frauds in Australia. However, these frauds can only be prevented of the consumers themselves are aware about the situation and do not indulge in activities which may look suspicious prima faice.


ACCC v ANZ Ltd [2015] FCAFC 103

ACCC v April International Marketing Services Australia Pty Ltd (No 8) [2011] FCA 153

ACCC v Australian Medical Association Western Australian Branch Inc [2003] FCA 686; (2003).

ACCC v Australian Medical Association Western Australian Branch Inc [2003] FCA 686; (2003)

ACCC v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 (2018). Retrieved from

Australian Competition and Consumer Act 2010(Cth)

Australian Competition Law | Cases. (2018). Retrieved from

Browne, D. (2018). User Rights Advocacy: The Australian Experience.

Corones, S. G. (2014). Competition law in Australia. Thomson Reuters Australia, Limited.

Dating & romance. (2018). Retrieved from

Edwards, R. R. (2015). Mistaken consumer electronic payments: An Australian solution?. AUSTRALIAN LAW JOURNAL, 89(12), 873-885.

Howells, G., & Weatherill, S. (2017). Consumer protection law. Routledge. (2018). Retrieved from…online-dating…/291d13ac4a1093ed29c84b88168bc32a (2018). Retrieved from…/phishing

smh Retrieved from › Business › Consumer affairs

Stewart, T. (2015). Unreasonable, unconscionable and oppressive contract terms in South African and Western Australian Consumer Law (Doctoral dissertation, University of Johannesburg).

Thampapillai, D., Tan, V., Bozzi, C., & Matthew, A. (2015). Australian commercial law. Cambridge University Press.