The Lenovo-owned company Medion Australia has been hit with a fine of $259,440 by the Australian Communications and Media Authority (ACMA) for failing to comply with customer identification rules. This failure resulted in nine known cases of individuals falling victim to SIM-swap scams, with five of them experiencing financial losses totaling over $160,000.
The ACMA investigation revealed that Medion had not successfully completed the required customer verification checks for more than 1600 SIM-swap requests and one password reset request. Such checks are crucial in preventing SIM-swap fraud, which can grant scammers access to online banking accounts and other personal information.
ACMA Chair Nerida O’Loughlin expressed concern over Medion’s noncompliance, stating that the company’s failure to adhere to the rules stood out noticeably. O’Loughlin further emphasized that telecommunications companies had more than enough time, as the rules had been in place for over a year, to establish robust verification processes.
As a result of the investigation, Medion has agreed to a two-year court-enforceable undertaking from the ACMA. This undertaking requires the company to engage an independent consultant to assess its compliance with customer identification rules and make any necessary amendments.
SIM-swap scams occur when fraudsters manipulate an individual’s information to request a new SIM, effectively taking control of the victim’s mobile number. As such scams began to proliferate in 2022, industry guidelines were introduced, mandating multi-factor identity authentication checks by telecommunications companies before executing user requests, such as SIM-swaps or account adjustments.
To combat evolving fraud schemes, the ACMA guidelines continually evolve, leading the Australian government to assess its Scams Code Framework. These guidelines inform the creation of industry codes for telcos, banks, and digital platforms, ensuring they remain adaptable and effective.
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