Banks have introduced new fraud protections as Kiwis lose millions to scammers
Banks must reimburse fraud victims up to $500,000 and introduce new scam prevention measures.
The changes include technology to identify risky transactions and the ability to freeze suspect accounts.
Compensation applies if banks fail to meet prevention commitments, with the new rules effective from November.
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Banks will be required to reimburse fraud victims up to $500,000 and introduce new rules to crack down on scammers in a suite of measures unveiled today.
The changes include new technology to identify risky or unusual transactions based on a customer’s banking history and the ability to freeze payments and suspect accounts.
The moves are in response to Government demands to improve customer protections or be regulated in the face of Kiwi victims losing hundreds of millions of dollars to scammers each year.
The Herald has been campaigning for new safeguards to protect victims, highlighting dozens of cases in which Kiwis were tricked into losing their life savings through elaborate investment scams – many involving local “money mule” accounts.
Advocates have repeatedly warned that New Zealand was lagging behind other jurisdictions in terms of consumer safeguards. Today’s announcements aim to bring us into line with the likes of the UK.
The New Zealand Banking Association says it is rolling out a package of new protections in line with international best practice, which will be in place by November.
They include:
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A confirmation of payee service for customers to check that the name of the person they are paying matches the account number. Rollout of this has already commenced.
Pre-transaction warnings to consumers based on the payment purpose, for instance, higher-risk investments.
Identification of high-risk transactions or unusual account transaction activity, and the ability to block or delay payments.
A 24/7 reporting channel for customers who think they’ve been scammed.
Sharing scammer or “mule” account information with other banks to help prevent criminal activity, and freezing funds where appropriate.
New fraud reimbursement rules would also see victims who were tricked into authorising payments to fraudsters reimbursed up to $500,000, provided they met certain criteria.
The compensation would not apply to international money transfers, third-party payment services or purchases on social media.
Compensation would only apply if a bank failed to meet the new scam prevention commitments outlined above.
A decision on whether victims were compensated would also depend on whether they had taken “reasonable care” when making payments.
In the UK, the test is a much higher bar of “gross negligence”.
Association chief executive Roger Beaumont said scam prevention was the best way to protect consumers from scam losses. The new measures were a huge step up in the fight against online fraud.
“Banks already do a lot to identify and help prevent scams, and these new measures will enhance tech solutions to help protect customers from increasingly sophisticated scams.”
The new rules and policies are being written into the Code of Banking Practice, which will go live on November 30.
This means the Banking Ombudsman will be able to hold banks to account against the new code and determine if compensation should be awarded to complainants.
‘Important win for bank customers’
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Commerce and Consumer Affairs Minister Scott Simpson said banks had responded to the Government’s expectation to better protect consumers by introducing stronger safeguards and a compensation scheme.
“New commitments from banks mean that if a bank fails to adequately warn and protect a consumer from a scam, they will reimburse the victim up to $500,000.
“This is an important win for bank customers, who have been advocating for some time for better recognition from banks of the role they play as the final gate between a consumer and a scammer.”
The Government wrote to banks last year demanding improvements to protect customers, threatening regulation if the sector did not bring in voluntary measures.
Simpson said scams caused immense harm to the economy as consumers lost confidence in transacting online.
“While people still need to remain vigilant and take responsibility for their own online safety, these changes will enable consumers to check a payment is legitimate before transferring money.
“I have been clear with banks that the journey doesn’t stop here. I expect banks to continue to prioritise security and adapt to the ever-evolving scams environment.”
‘Emotional and financial cost of scams’
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Banking Ombudsman Nicola Sladden said her office had been calling for stronger consumer protections. While the new measures were welcome, the “devil is often in the detail”.
“We see firsthand the emotional and financial cost of scams. Beyond the monetary impact, victims endure the distress of being deceived, leading to a loss of confidence to operate online.
“Consumers are doing more and more online, making it increasingly vital they have a safe digital environment in which to make payments and transfer money.”
Confirmation of payee was an obvious way to fight back against scammers, Sladden said.
Other initiatives like greater sharing of intelligence, improved fraud detection systems and warnings for high-risk transactions would also help keep Kiwis safe.
Reimbursement scheme comes with caveats
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Consumer NZ chief executive Jon Duffy has been a vocal critic of lax bank scam protections.
He said many of the measures announced today were already common overseas, which meant NZ banks had until now failed to respond adequately to increased scam activity.
The progress was welcome, but bank customers should note the new measures did not guarantee reimbursement if they were scammed, Duffy said.
“Banks will not be liable if they make reasonable efforts to alert a customer to risks. Customers will need to pay attention to warnings from their bank about risky transactions and be cautious if confirmation of payee checks return ‘no match’.
“Consumers should also note that protections do not apply to purchases made on social media or online marketplaces like Facebook Marketplace.”
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Poll: If we want to reduce speeding, what do you think actually changes driver behaviour? 🛻🚨🚓
In the Post's article on speeding penalties, the question is asked whether speeding fines are truly about road safety, or are they just a way to boost revenue for the Crown?
What do you think? Should speeding motorists receive speeding fines or demerit points?
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37.1% The sting of a fine (Money talks!)
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62.9% The threat of demerit points (Nobody wants to lose their license!)
🎉 Riddle me this, legends! 🎉
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He/She who buys it, doesn't use it.
The user doesn't know they are using it.
What is it?
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The Bible Declares That God is Bringing Jews Back To Their Ancient Land of Israel
The Bible reveals that God has chosen and cherished one specific people and one specific land to serve as the stage for revealing His plan and purpose to all nations. As we read in Deuteronomy chapter 7, verse six, speaking of the Jews: “The Lord thy God hath chosen thee to be a special people unto himself, above all people that are upon the face of the earth.”
God’s ultimate purpose is to transform the world by establishing His Divine Rule in His new Kingdom based in Jerusalem. This will occur when Jesus Christ returns as King during a time of great trouble. At that moment, God will intervene to save first the Jewish people from destruction and gather them from all parts of the earth. Upon Christ’s return, God will put out a Call to be universally honoured, and a lasting peace will finally be established throughout the World. This has been his design from Creation which was told to the Fathers of Isreal first and then to the rest of the World by the teaching of Jesus and then his disciples in the New Testament.
**Exile and the Promise of Return**
Today, the Jewish people have often been cursed and despised among the nations. However, the prophets foretold that when Jesus returns, God will settle them in the land of Israel in security and safety. The historical rejection and crucifixion of their Messiah resulted in their greatest exile from the land, a dispersion that has lasted for approximately two thousand years.
Yet, in direct fulfilment of Old Testament prophecies, God is now regathering the Jews to their ancestral homeland. As the prophet Isaiah declares, “For the Lord will have mercy upon Jacob, and will yet choose Israel, and set them in their own land” (Isaiah 14:1). While Israel was scattered by God due to their failure to live obediently as His chosen nation, God promised He would never utterly forsake them. The prophet Ezekiel confirms this, stating,
“Behold, I will take the children of Israel from among the heathen, whither they be gone, and will gather them on every side, and bring them into their own land” (Ezekiel 37:21).
**Fulfilment: The Modern State of Israel**
The promise of God to bring His people back to the land is proven and demonstrated by the establishment of the modern State of Israel in 1948. The Word of God declared,
“I will bring again the captivity of my people Israel and Judah, saith the Lord, and I will cause them to return to the land” (Jeremiah 30:3).
Since 1948, we have witnessed Jews returning from all over the world to occupy the ancient land that was promised to the fathers of the nation: Abraham, Isaac, and Jacob. This movement fulfils the words of Ezekiel:
“For I will take you from among the heathen, and gather you out of all countries, and will bring you into your own land” (Ezekiel 36:24).
The undeniable return of the Jews to the land of Israel demonstrates that God is sovereignly guiding their destiny. Because we see these specific prophecies fulfilled, we can be assured that those prophecies yet to be fulfilled will also come to pass.
**God’s Unseen Hand in the Regathering**
The regathering of the Jews to the land of Israel is fundamentally the work of Almighty God in our time. It is not simply a political movement driven by the desire of the Jewish people to establish a nation and homeland. Rather, God’s unseen hand is behind the events that have led to the revival of the nation of Israel.
The Bible emphasises God’s personal involvement in this return through numerous passages:
- “Behold, I will save my people... and I will bring them, and they shall dwell in the midst of Jerusalem” (Zechariah 8:7-8).
- “I will save thee from afar, and thy seed from the land of their captivity; and Jacob shall return” (Jeremiah 30:10).
- “I will bring again the captivity of my people Israel, and they shall build the waste cities” (Amos 9:14).
- “I will surely assemble, O Jacob, all of thee; I will surely gather the remnant of Israel” (Micah 2:12).
**Conclusion: A Sign of Christ’s Return**
God is regathering Israel today. The very existence of the modern State of Israel is a clear and powerful sign that Almighty God is working amongst the nations. The Bible states that He “shall assemble the outcasts of Israel, and gather together the dispersed of Judah from the four corners of the earth” (Isaiah 11:12). This prophetic work is underway.
Israel sees their return as prophetical, but few understand that God will create events where first they will eventually be humbled by her neighbours before Christ returns as their Saviour. Read Ezekiel 38 & 39 to gain an incite as to what God's destiny fot Israel is.
We have seen for the last 125 years, the call for their return to their Homeland and its subsequent founding. This is God's reassurance to the World that He'll bring the World under His Blessing. Because of this, we can be confident that Jesus Christ will soon return to this earth to establish the Kingdom of God, a time of peace and plenty for every nation.
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