Financial Crime World

Here is the article rewritten in markdown format:

Scams in New Zealand’s Banking System: A Growing Concern

New Zealand’s banking system has been plagued by scams, resulting in significant losses for customers. In this article, we will discuss the issue of scams and explore the potential benefits of implementing a real-time payments system with name-and-account number checking capabilities.

Scam Statistics

  • 31,000+ customers affected: Over 31,000 Australian customers lost more than A$558 million to scams in 2022.
  • NZ scam losses estimated at $200m annually: Bank data suggests that nearly $200 million is lost each year due to scams in New Zealand, significantly higher than the reported figures to Cert NZ.

Recent Developments

Australian Banking Association’s Fraud Reporting Exchange

  • Launched in May 2022: The Australian Banking Association has introduced a Fraud Reporting Exchange platform to help banks prevent and recover from scammers.
  • Improved consumer protections: ASIC updated its e-payments code governing electronic transactions after a review, enhancing protections for consumers and requiring banks to assist customers with recovering money transferred in error.

New Zealand Banks’ Stance on Standardized Payments

  • Support for standardized payments: ASB and BNZ are backing the implementation of a standardized payments model similar to the UK’s.
  • No direct response from ANZ: ANZ did not directly address the issue of implementing a real-time payments system with name-and-account number checking capabilities.

Authorized Payment Scams: A Growing Concern

  • Focus on unauthorised scam payments must change: Starks points out that authorized payment scams are where banks are usually not found liable for losses.
  • Recent case highlights vulnerability: An Auckland resident was scammed by a faked term deposit offer from Citibank N.A, which the FMA warned about in the same month.

Implementation of Name and Number Checking

  • Potential to prevent fraud: Starks believes that implementing name and number checking capabilities could have prevented this particular scam.
  • Wider implications: transactions across multiple banks: The scam involved transactions across two NZ banks, highlighting the need for a robust system to prevent such cases.

Banks Under Attack

  • Criminals targeting banks: Scammers are finding success within New Zealand’s banking system, with banks being targeted by criminals.