In a significant development, Medion Australia, a prominent subsidiary of Chinese multinational Lenovo and German electronics giant Medion, has been slapped with a hefty fine of $259,440 by the Australian Communications and Media Authority (ACMA). The punitive measure results from Medion’s non-adherence to customer identification regulations.
Unveiling the Investigation
The investigation into Medion’s practices, which culminated in June of the previous year, stemmed from fraud intelligence gathered in 2022. The intelligence revealed that customers were negatively impacted due to Medion’s failure to comply with identification norms.
Violation of Identity Verification
The ACMA probe unveiled that Medion Australia neglected to undertake the requisite customer verification for over 1,600 SIM-swap requests and one password reset request. This lapse led to nine customers experiencing illegal SIM card swaps. Consequently, five customers were swindled out of a collective sum exceeding $160,000 due to SIM-swap scams.
The Consequences and the Way Forward
ACMA Chair, Nerida O’Loughlin, stressed the gravity of the infringement, particularly considering the decrease in scams since the present rules were put into effect over a year ago. Medion now faces a two-year court-enforceable undertaking, involving an independent compliance review and periodic progress reporting to ACMA.
The industry regulations, instituted in 2022, mandate telecommunications firms to execute multi-factor identity authentication before transacting high-risk customer operations. Furthermore, the Albanese government is currently soliciting consultations on a Scams Code Framework, contemplating the imposition of mandatory codes across various sectors and evaluating customer redress mechanisms for code breaches.
ACMA recommends those suspecting to be victims of a scam to connect with their service provider and report to Scamwatch for additional assistance and information.
