NZBA launches new initiatives against scams and fraud

Investment and involvement of all affected sectors required, chief says

NZBA launches new initiatives against scams and fraud

New Zealand Banking Association (NZBA) has ramped up its fight against fraud and scams with the launch of a number of new initiatives.

“Our retail banks already have systems in place to help detect and warn customers about potential scams and the further initiatives announced by the industry today are expected to have a significant impact in combatting scams,” NZBA CEO Roger Beaumont (pictured above) said. “But we have reached a point where a new approach to fighting fraud and scams is required and this will need the involvement and investment of all affected sectors.”

Beaumont said the approach falls into three areas of focus: making it harder for criminals to operate in New Zealand, making it harder for them to target Kiwis, and supporting ongoing scam awareness.

So, how is NZBA working to protect Kiwis from scams?

Anti-scam centre

NZBA is backing the establishment of an anti-scam centre, similar to that in Singapore, to “provide a centralised and coordinated multi-sector approach to fighting scams from a New Zealand-wide perspective.”

See LinkedIn post here.

“Confirmation of payee” service

The industry body is also instigating an industry-wide “confirmation of payee” account name-checking service to enable anyone making an online payment from one bank account to another to check the name of the account they are paying. Work is currently underway to look at options for this service.

“We will need to investigate privacy considerations and banks’ ability to disclose account names to third parties, as well as technical issues,” Beaumont said. “Banks will work with Payments NZ, which governs the payments system, to help make this a reality.”

Scrapping links from text messages to customers

Currently, banks do not send customers text messages asking them to log in to their online banking. They are also now working to remove all weblinks or hyperlinks in text messages to customers while encouraging other industries to do the same.

“Links in texts are one common way scammers pretending to be a legitimate organisation mislead victims into providing personal information,” Beaumont said. “Removing links from texts reduces this kind of scam risk.”

Combatting mule accounts

Banks will investigate the ability to freeze “mule” accounts, which fraudsters use to transfer stolen funds.

“Sharing information as scams are unfolding is important and banks will also work with the relevant authorities to investigate how they could share scam-related information in real time, while maintaining legal obligations around privacy and confidentiality,” Beaumont said.

Improving outcomes for scam victims

NZBA highlighted the importance of improving consistent and timely outcomes for customers who suffer financial losses due to a scam.

“Under the Code of Banking Practice, banks reimburse customers for unauthorised payments where the customer hasn’t been dishonest or negligent, has complied with the bank’s terms of conditions, and has taken reasonable steps to protect their banking,” Beaumont said.

“The industry will work closely with the banking ombudsman to support a more consistent and timely response to customers who have been scammed.

Raising scam awareness

Another important initiative of the NZBA is to increase resources available to support ongoing awareness of scams and how to avoid them.

“Earlier this year the banking industry rolled out a ‘Take a sec to check’ advertising campaign to encourage people to be alert to scams,” Beaumont said. “Banks also funded a television documentary commissioned by the Banking Ombudsman called ‘You’ve Been Scammed by Nigel Latta’. Banks also routinely run their own scam awareness initiatives for customers. Banks will be building on that work.”

In a media release, NZBA said the timing of each of these initiatives will vary depending on their complexity and feasibility.

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