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New Zealand banks join forces to combat scams through new measures

In this post:

  • The New Zealand banking sector is taking proactive measures to combat scams targeting customers.
  • In the second quarter of 2023, there were 1,950 reported scams in New Zealand, resulting in a total loss of NZ$4.2 million ($2.48 million).
  • Consumer advocates, including Consumer NZ’s CEO Jon Duffy and Banking Ombudsman Nicola Sladden, stress the urgent need for swift action to protect New Zealanders from scams.

The New Zealand banking sector is taking proactive measures to combat scams targeting customers, which includes establishing a national Anti-Scam center, pooling resources to combat money laundering, and enhancing public awareness.

In the second quarter of 2023, there were 1,950 reported scams in New Zealand, resulting in a total loss of NZ$4.2 million ($2.48 million), according to data from the New Zealand government’s Computer Emergency Response Team.

A consumer watchdog has criticized the banking industry for not implementing technology to verify account names, potentially exposing consumers to unnecessary risks. The watchdog suggests that those who suffer financial losses due to fraud stemming from this loophole should be compensated.

New Zealand banks unite against scams

The New Zealand Banking Association, representing major banks in the country, has announced a series of measures to combat fraud and tackle scams. These steps come in response to significant losses suffered by victims and negative publicity in recent months, including the potential for a class-action lawsuit.

Roger Beaumont, the CEO of the New Zealand Banking Association, stated that the unified efforts of retail banks are expected to address fraud and scams positively. Notably, the timing of each initiative will depend on its complexity and feasibility.

Beaumont then outlined measures to bolster the fight against scams and fraud. These initiatives aim to make it more challenging for criminals to operate in New Zealand and target its citizens. One key proposal is establishing an Anti-Scam Centre akin to the one in Singapore to coordinate a multifaceted approach against scams nationwide. Telcos and social media companies have expressed interest in supporting this endeavor, signaling potential collaboration in the future. 

Beaumont emphasized exploring a ‘confirmation of payee service’ for online payments, allowing users to verify the recipient’s account name. While privacy concerns and technical issues need to be addressed, this service could significantly enhance security. Notably, banks are actively working to eliminate hyperlinks in text messages to customers, a common tactic scammers use to deceive victims. 

Additionally, efforts are underway to explore the possibility of freezing mule accounts, further fortifying the defenses against fraudulent activities. Beaumont emphasized that banks do not send text messages prompting customers to log in to their online banking accounts. These measures collectively represent a robust and comprehensive approach to safeguarding the interests of New Zealanders in an increasingly digital landscape.

Consumer advocates urge swift bank action

Consumer NZ’s CEO, Jon Duffy, highlighted the pressing need for swift action to safeguard New Zealanders from the scourge of scammers, estimated to be draining hundreds of millions from local victims annually. He expressed concern that the number of scam victims could continue to rise without immediate intervention by banks and businesses to enhance customer protection.

Duffy pointed out that New Zealand’s banks lagged considerably behind counterparts in comparable countries regarding scam prevention measures. He stressed the urgency of implementing account matching technology, a straightforward solution that should have been in place already to ensure money reaches its intended recipient.

While Consumer NZ supports the proposed measures, Duffy emphasized that an industry-led approach may lack the necessary independence and consumer trust, making administration challenging. Instead, he suggested that the government allocate funding to a reputable organization like Netsafe to oversee the initiative.

Banking Ombudsman Nicola Sladden voiced her endorsement for the proposed initiatives, highlighting the critical need for their prompt implementation to fortify consumer protection against fraud and scams. She underscored the potential game-changing impact of introducing confirmation of payee technology, a measure already proven successful in the United Kingdom and beginning to gain traction in Australia.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

 

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