06 November 2019

Fintel Alliance reveals financial crime-fighting results in 2018-19

The Fintel Alliance, an AUSTRAC initiative, has today revealed its major operational results for 2018-19 in the fight against serious and organised crime.

The Fintel Alliance, is AUSTRAC’s public-private partnership that combines the expertise and skills of federal and state government intelligence and law enforcement agencies and private sector businesses to protect the Australian financial system and community from criminal abuse.

Over the past year the key achievements include:
•contributing intelligence to national taskforces, leading to the arrests of 9 of Australia’s Most Wanted criminals and a 380% increase in reports on operations of outlaw motorcycle gangs
•saving 2,500 people from credit card fraud and identify theft, with a further 87 potential victims identified or protected across all operations
•dismantling significant fraud networks and National Disability Insurance Scheme (NDIS) fraud
•detecting suspicious activities relating to child sexual exploitation by an increase of 580%
•issuing 131 intelligence products to law enforcement and intelligence agencies
•contributing to the arrest of 108 persons of interest and closure of the accounts of over 90 high-risk customers, and
•providing vital intelligence for ongoing cybercrime, cyber scams and virtual currency money laundering operations.

AUSTRAC CEO Nicole Rose PSM, said the financial intelligence and information shared through the Fintel Alliance is critical in helping AUSTRAC and its government partners identify, disrupt and dismantle criminal networks that prey on the most vulnerable.

“It is very encouraging to see the Fintel Alliance already making major contributions to fighting serious financial crime after its first two years in operation,” said Ms Rose.

“I commend the efforts of Fintel Alliance industry and government partners and their willingness to collaborate in this fight.

“The government’s increased funding of $28.4 million to AUSTRAC over the next four years will allow the Fintel Alliance to expand its capabilities to better combat serious financial crime,” said Ms Rose.

Fintel Alliance Strategic Advisory Board Chair, Roger Wilkins AO applauded the commitment of all organisations and staff involved.

"The Fintel Alliance is building a partnership, or coalition, between public sector law enforcement and policy agencies, and private sector financial organisations to prevent and disrupt the flow of illicit funds,” said Mr Wilkins.

New indicators report on combatting child sexual exploitation

As part of the operational results announced today, AUSTRAC has also published a joint industry and government financial indicators report to combat child sexual exploitation.

The report, developed through the Fintel Alliance, will help the financial services industry and law enforcement identify financial activity that may be related to child exploitation activities.

Download the reports
•Fintel Alliance annual report 2018-19 (PDF, 3.9MB)
•Fintel Alliance combating the sexual exploitation of children for financial gain activity indicators report (PDF, 218KB)

12 November 2019

Man arrested as part of cryptocurrency investigation

Detectives from the E-Crime Squad have arrested a man today as part of an investigation into unregistered cryptocurrency transactions.

The 38-year-old Cairnlea man was arrested at his home address in Cairnlea.

He is currently being interviewed in relation to two Commonwealth offences:
•Section 76A(5) of the Anti-Money Laundering and Counter –Terrorism Financing Act 2006 (Cth): Having provided a registrable Digital Currency Exchange (DCE) service when not registered; and continuing to provide a registrable DCE service following AUSTRAC's Cease and Desist notice of 1 November 2018; and
•Section 400.9 of the Criminal Code Act 1995 (Cth): Dealing with property reasonably suspected of being proceeds of crime.

Police seized a substantial quantity of cash and false identification documents during the warrants, which were executed from just after 7am.

Detectives also seized a cryptocurrency ATM from a shopping centre in Braybrook today as part of the investigation.

The investigation commenced in June this year after AUSTRAC provided intelligence regarding reports of scam activity linked to the ATM, which led to police examining a number of transactions on the machine.

Victoria Police worked in cooperation with AUSTRAC during this investigation, which is one of the first by the E-Crime Squad relating to cryptocurrency transactions.

AUSTRAC’s acting National Manager Intelligence Operations David Hawkins said this outcome demonstrates the importance of close collaboration between AUSTRAC and our law enforcement partners in stopping financial crime.

01 November 2019

Furniture chains pay penalties for making alleged misleading 'was/now' price claims

Four furniture retailers have each paid a penalty of $12,600 after the ACCC issued them with an infringement notice following an ACCC investigation into the industry’s use of ‘was/now’ price comparisons in advertising.

Plush – Think Sofas Pty Ltd (Plush); Koala & Tree Pty Ltd (trading as Koala Living); ESR Group Holdings Pty Ltd (trading as Early Settler); and Oz Design Furniture Pty Ltd each received an infringement notice.

The ACCC had reasonable grounds to believe each retailer had made false or misleading representations by claiming that consumers would save money if they purchased certain furniture items when this was not the case.

The retailers used advertising statements such as ‘was $2599, now $2049’, or ‘$799, save $200’, when the furniture item had never been advertised at the ‘was’ price, or was only advertised at the ‘was’ price for a short period of time.

For example, one of the retailers advertised a ‘Roller Ottoman’ at a price of $539 with the words ‘save $360’, even though it was available for $449 directly before the sale, while another advertised an occasional chair with the words ‘$799, save $200’, when its usual price for the previous six-months was $699, $100 cheaper than the sale price.

“Consumers rely on comparative pricing to find the best deal available. If there are no genuine savings, businesses are misleading consumers," ACCC Commissioner Sarah Court said.

“Using claims of false savings to induce consumers to purchase products also disadvantages competing retailers which are complying with the law.”

“The ACCC has taken this enforcement action to send a strong message to retailers that they must ensure that any claimed savings are accurate and based on a “before” price which has been offered for a reasonable period when using comparison advertising,” Ms Court said.

01 November 2019

ZeniMax to refund consumers for the Fallout 76 game

The ACCC has accepted a court-enforceable undertaking from three related video gaming companies after they acknowledged they were likely to have misled consumers about their consumer guarantee rights in relation to the online action game Fallout 76.

The companies, ZeniMax Media Inc, ZeniMax Europe Limited and ZeniMax Australia Pty Ltd (together, ZeniMax), accepted that their actions were likely to have contravened the Australian Consumer Law (ACL).

The ACCC received complaints that ZeniMax representatives told consumers that they were not entitled to a refund after they had experienced a variety of faults with the Fallout 76 game, including, in some cases, problems with the servers, lagging, graphic and visual problems.

“ZeniMax has acknowledged that they are likely to have misled certain Australian consumers about their rights to a refund when they experienced faults with their Fallout 76 game,” ACCC Commissioner Sarah Court said.

ZeniMax will offer to provide refunds to consumers who contacted them between 24 November 2018 and 1 June 2019 to request a refund and have not already received one. Consumers who accept a refund will no longer be entitled to access and play the game.

“When a consumer buys a product it comes with automatic consumer guarantees, and retailers must ensure their refunds and returns policies do not misrepresent what the Australian Consumer Law provides,” Ms Court said.

“When a consumer has purchased a product that has a fault which amounts to a major failure, the Australian Consumer Law provides them with the right to ask for their choice of either a repair, replacement or refund.”

ZeniMax has also undertaken to amend its customer service documents and scripts to address the ACCC’s concerns about misrepresentation of the consumer guarantee rights under the ACL.

ZeniMax’s undertaking is available at ZeniMax Media Inc, ZeniMax Europe Limited and ZeniMax Australia Pty Ltd.

14 November 2019

Concerns about Assa Abloy fire doors deal

The ACCC has preliminary concerns that Assa Abloy’s proposed acquisition of E Plus Building Products Pty Ltd would significantly reduce competition in the market for fire door cores.

Assa Abloy, through its subsidiary Pyropanel, and E Plus both supply fire door cores to licensed fire door manufacturers throughout Australia.

“Our preliminary view is that the proposed acquisition raises significant competition concerns in what is an already highly concentrated market,” ACCC Commissioner Stephen Ridgeway said.

“There are only three companies who supply fire door cores to external manufacturers, outside their own vertically integrated business. Combining Pyropanel and E Plus would create a market with only two suppliers, with Assa Abloy controlling about two thirds of that market. The ACCC believes that there is a real chance that this will lead to higher prices for Australian businesses which require certified fire doors.”

The ACCC’s preliminary view is that any new supplier would be unlikely to enter the market in time, and at a sufficient scale, to prevent price increases by a combined Assa Abloy-E Plus entity.

“There are high barriers for a company to start supplying fire door cores in Australia due to the stringent testing and certification regime. Developing a range of certified products to compete with Pyropanel and E Plus is likely to be costly and time consuming, delaying new entrants,” Mr Ridgeway said.

“As Assa Abloy is now vertically integrated across all aspects of the door manufacturing business the proposed acquisition would also increase Assa Abloy’s incentives to block rival manufacturers from testing their products with Assa Abloy cores, locks, seals, and other door products.”

19 November 2019

Big Red Jacks pays penalty for alleged breach of mandatory safety standard

Hai Feng International Pty Ltd, trading as Big Red Jacks Tools & Equipment (Big Red Jacks), has paid a penalty of $12,600 after the ACCC issued an infringement notice.

The ACCC issued the infringement notice because it had reasonable grounds to believe that Big Red Jacks had supplied a vehicle jack that did not comply with the Consumer Product Safety Standard for Vehicle Jacks.

The ACCC alleged that Big Red Jacks supplied a ‘Torin Big Red 4 ton double ram bottle jack’ (4 Ton Jack) which did not comply with both labelling and performance requirements for vehicle jacks because:
•the jack was not permanently and legibly marked with specified instructions regarding its operation and its working load limit; and
•the ‘overload protection’ function did not operate in some instances until the weight placed on the jack reached 8,450 kg, when its nominated capacity was 4,000 kg. Where fitted, the overload protection function must activate when the jack is subjected to a force no greater than 15 per cent of its nominated capacity (that is, between 4000 kg and 4600 kg for the 4 Ton Jack).

“Vehicle jacks that do not comply with the mandatory standard pose a very serious risk of injury or death to consumers using them,” ACCC Deputy Chair Delia Rickard said.