Urgent Action Needed to Combat Online Banking Fraud in New Zealand
Government Calls for Immediate Action to Protect Customers
In an open letter, the Minister of Commerce and Consumer Affairs, Hon Andrew Bayly, has urged the banking industry to take immediate action to protect customers from growing scams and online fraud. The government’s concerns are fueled by the fact that online fraud has cost New Zealanders nearly $200 million in 2023.
Specific Requests
The Minister has made specific requests for:
- Introduction of a confirmation of payee system
- Update to the Code of Banking Practice
- Voluntary victim reimbursement scheme
Industry Response
The banking industry has responded swiftly, confirming plans to introduce a confirmation of payee system this year and investigating the merits of a voluntary reimbursement scheme. The industry is also implementing additional measures to protect customers from fraud, including:
- Awareness campaigns
- Removing hyperlinks from texts
- Supporting the establishment of an Anti-Scam Centre
Further Recommendations
Experts believe that there are further steps the government can take to combat scams and online fraud, including:
- Appointing a lead Minister and government agency to coordinate efforts going forward
- Supporting the evolution of the banking industry’s national Anti-Scam Centre
- Encouraging telecommunications providers and digital communications platforms to take further steps to combat fraud
- Working with regulators in other countries to identify best practice
Multi-Sector Approach Needed
The government has been urged to establish a coordinated multi-sector approach, with clear accountability and expertise. The Commerce Commission, Department of Internal Affairs, Financial Markets Authority, Ministry of Business, Innovation and Employment, Netsafe, and Police all have roles to play in combating scams and online fraud.
Supporting the Banking Industry’s Initiatives
Experts at MinterEllisonRuddWatts believe that the government’s efforts should be focused on supporting the banking industry’s initiatives while also encouraging other sectors to take action. The law firm provides legal advice, risk assessments, and compliance recommendations to help clients navigate the complex landscape of scams and online fraud.
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