The convergence of landmark legal precedent and groundbreaking legislation creates unprecedented accountability for board members and senior executives
When I speak with Australian directors about cybersecurity governance, the conversation inevitably turns to one critical question: "What's our actual liability if something goes wrong?" Until recently, that question existed in a regulatory grey area. Not anymore.
The December 2024 Western Australian District Court decision in Mobius Group Pty Ltd v Inoteq Pty Ltd [2024] WADC 114, combined with the passage of the Scams Prevention Framework Act 2025, has fundamentally shifted the liability landscape for Australian boards and senior leadership teams.
Together, these developments create a new reality where directors can no longer treat scam prevention as an operational IT issue - it's now a core governance responsibility with direct legal and financial consequences.
The Mobius case involved a straightforward business relationship that turned into a $235,400 nightmare. An electrical contractor (Mobius) completed work for a client (Inoteq), but before payment could be made, fraudsters compromised Mobius's email system and sent false payment instructions to Inoteq.
Here's where it gets interesting for board governance: when Inoteq tried to verify the payment change by phone but couldn't hear clearly due to a poor connection, they made a fatal error. Instead of trying again, they sent an email to what they thought was Mobius - but was actually the fraudster's compromised account. The fraudster promptly provided fake confirmation documents.
The court's finding was unambiguous: Inoteq had to pay twice - both the fraudulent payment and the legitimate invoice. Judge Massey described their verification efforts as "astonishing" and "inadequate," establishing that businesses have a clear duty to implement robust verification procedures for payment changes.
For directors, the implications are stark: this isn't about whether your cybersecurity is perfect - it's about whether your organisation has reasonable processes to protect itself when others' security fails.
Just weeks after the Mobius decision, Parliament passed the Scams Prevention Framework Act 2025, creating the world's first comprehensive legislative framework for scam prevention. Initially targeting banks, telecommunications providers, and digital platforms, the Framework establishes five core principles that regulated entities must implement:
The Framework isn't just regulatory guidance - it carries penalties of up to $50 million per offence for organisations that fail to take "reasonable steps" to comply with these principles.
When you overlay the Mobius precedent with the Scams Prevention Framework, a clear picture emerges for board oversight responsibilities:
While the Framework targets corporate entities, Australian corporate law principles mean directors who fail to ensure adequate governance systems could face personal liability under their duties of care and diligence. The Mobius decision demonstrates that courts are willing to scrutinise business processes and find them inadequate.
The Mobius court's criticism of inadequate verification procedures provides concrete guidance on what "reasonable steps" means in practice. Boards can no longer rely on basic procedures - the standard is now rigorous, multi-channel verification with proper escalation when initial attempts fail.
The Framework's principles require board-level oversight of scam prevention systems. This isn't something that can be delegated entirely to IT or operations - it requires the same governance attention as financial controls or safety management systems.
Both the Mobius decision and the Framework emphasise the importance of documented procedures and measurable outcomes. Boards need to ensure their organisations can demonstrate they've implemented and followed appropriate processes.
Immediate Actions (Next 30 Days):
Strategic Implementation (Next 90 Days):
Long-term Governance (Next 12 Months):
While many organisations will treat these developments as compliance burdens, forward-thinking boards recognise the competitive opportunity. Customers and business partners are increasingly aware of scam risks and actively seek to work with organisations that demonstrate robust protection capabilities.
The organisations that embrace both the Mobius lessons and the Framework principles as strategic initiatives will build stronger customer relationships, reduce operational risks, and create genuine competitive advantages in trust and reliability.
The convergence of the Mobius decision and the Scams Prevention Framework creates a new baseline for board accountability around scam prevention. Directors can no longer treat this as an operational IT issue - it's now a core governance responsibility that requires the same attention and oversight as financial reporting or workplace safety.
The question isn't whether your organisation will be affected by these changes - it's whether you'll be ahead of the curve or scrambling to catch up when regulators start enforcement actions or when your organisation faces its own Mobius-style incident.
Australian boards that take proactive action now will not only protect their organisations and stakeholders but position themselves as leaders in the new regulatory environment. Those that wait may find themselves explaining to shareholders, regulators, and courts why they didn't act when the path forward was clear.
The intersection of the Mobius precedent and the Scams Prevention Framework creates both significant risks and genuine opportunities for Australian organisations. At Insicon Cyber, we specialise in helping boards and senior leadership teams navigate these complex regulatory requirements while building sustainable competitive advantages.
Insicon Cyber works with Executives and Boards across four related areas:
The Mobius case demonstrates that human error in verification processes can be catastrophic. Your staff are your first and last line of defence against ever more sophisticated scams relating to business email compromise (BEC) and invoice fraud. In partnership with KnowBe4, we develop targeted training programmes that go beyond generic cybersecurity awareness to address the specific verification and escalation procedures your organisation needs. Our training covers real-world scenarios, builds muscle memory for proper verification protocols, and ensures your team can recognise and respond appropriately when initial verification attempts fail - exactly the gap that cost Inoteq dearly in the Mobius case.
When fraudsters compromise your suppliers' or customers' email systems, your organisation becomes vulnerable regardless of your own cybersecurity posture. We help you develop robust third-party risk management frameworks that protect against supply chain compromise, establish alternative verification channels with key partners, and create contractual protections that clarify liability allocation. In the post-Mobius environment, understanding and managing these interconnected risks isn't optional—it's essential for protecting your organisation from becoming the next cautionary tale.
Many organisations lack the senior cybersecurity leadership needed to navigate this new regulatory landscape effectively. Our Fractional CISO or CISO-as-a-Service capabilities provide board-level cybersecurity expertise without the full-time commitment, and brings deep technical knowledge and strategic business acumen to help boards fulfil their governance obligations. Whether you need ongoing strategic guidance or intensive support during Framework implementation, our Fractional CISO services ensure you have the right leadership to turn these challenges into competitive advantages.
Don't wait for regulators or the courts to define your liability. The smart money is on getting ahead of these requirements and building the kind of robust, trustworthy operations that customers and partners demand in today's digital economy.
Contact Insicon Cyber directly to arrange a confidential discussion about how these developments affect your organisation's governance requirements and competitive positioning. Let's turn these regulatory challenges into your competitive advantages.
Because when it comes to board liability and scam prevention, being prepared isn't just good governance—it's essential business strategy.
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