The New Zealand Banking Association has updated its practice code to include new customer scam protections and compensation.
The new protections — set to go live on November 30 — were being delivered through an update to the Code of Banking Practice and target authorised payment scams where people are tricked into making payments to criminals.
Changes include:
- Pre-transaction warnings to customers for certain payments
- A Confirmation of Payee service for customers to check that the name of the person they are paying matches the account number, which finished rolling out in April this year
- Identification of and response to high-risk transactions or unusual account transaction activity, and the ability to delay or block transactions in some cases
- Providing a 24/7 reporting channel for customers who think they’ve been scammed, and responding to protect accounts
- Sharing scammer account information with other banks to help prevent criminal activity, and freezing funds where appropriate, which was announced earlier this month.
New Zealand Banking Association chief executive Roger Beaumont said where a bank fails to meet the five new scam protection commitments, it would compensate all or part of the loss for eligible customers.
Banks will also continue to compensate losses for eligible customers where their banking was accessed without the customer's authority.
"The five new scam protection commitments in the updated Code of Banking Practice show that our banks are serious about helping to keep their customers safe from increasingly sophisticated scams. They’ve invested heavily in this," Beaumont said.
"We have adopted a prevention-led approach to fighting scams because global experience shows that’s the best way to help protect consumers from scam losses."
He said the new compensation approach recognised shared responsibilities for protecting New Zealanders from scams.
"Banks have stepped up their customer protections and will be accountable for those measures, but they cannot take on full liability for scam losses that are beyond their control and may start with a fake ad or chat on social media, or a fake search engine result.
"Industries such as social media companies, global tech platforms, and telcos also have a major role to play in preventing scams. Consumers are also encouraged to take reasonable care to protect their banking."
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