Banking industry to lead the way on national cross-sector approach to scams

The retail banking industry today announced a number of key initiatives to further fight fraud and scams, leading the way for a significant, co-ordinated, multi-sector approach to protecting New Zealanders including:

  • Supporting the establishment of a centralised, co-ordinated, multi-sector national Anti-Scam Centre
  • Instigating an industry wide ‘confirmation of payee’ account name checking service
  • Committing to removing all weblinks from texts to customers
  • Working together to combat ‘mule’ accounts
  • Investigating the sharing of real time information between organisations impacted by scams
  • More consistent and timely outcomes for customers who suffer financial losses
  • Driving further public awareness of scams and how to avoid them.

New Zealand Banking Association chief executive Roger Beaumont says the joint commitment by retail banks is expected to have a positive impact in tackling fraud and scams, but the banking industry can’t address this issue in isolation.

“Scams go much wider than our industry, affecting government agencies, including police, telcos, social media companies, internet service providers and other sectors too.

“Our retail banks already have systems in place to help detect and warn customers about potential scams and the further initiatives announced by the industry today are expected to have a significant impact in combatting scams. But we have reached a point where a new approach to fighting fraud and scams is required and this will need the involvement and investment of all affected sectors.

“The approach falls into three areas of focus, making it harder for criminals to operate in New Zealand, making it harder for them to target New Zealanders, and supporting ongoing public awareness of scams and how to identify them.”

‘We support the establishment of an Anti-Scam Centre, similar to the one in Singapore, which would provide a centralised and co-ordinated multi-sector approach to fighting scams from a New Zealand-wide perspective. Telcos and social media companies have indicated an interest in supporting this initiative, and we look forward to working with them and others, including the government, to further protect New Zealanders.

“Work is underway to look at options for a ‘confirmation of payee’ service to enable anyone making an online payment from one bank account to another to check the name of the account they are paying. We will need to investigate privacy considerations and banks’ ability to disclose account names to third parties, as well as technical issues. Banks will work with Payments NZ, which governs the payments system, to help make this a reality.

“Banks are working to remove all weblinks or hyperlinks in text messages to customers and encourage other industries to do the same. Links in texts are one common way scammers pretending to be a legitimate organisation mislead victims into providing personal information. Removing links from texts reduces this kind of scam risk.

“Banks will investigate the ability to freeze ‘mule’ accounts, which are used by fraudsters to transfer stolen funds. The mule account owners may be complicit with the criminals or may not be aware their accounts are being used in this way.

“Sharing information as scams are unfolding is important and banks will also work with the relevant authorities to investigate how they could share scam-related information in real time, while maintaining legal obligations around privacy and confidentiality.

“Improving consistent and timely outcomes for customers who suffer financial losses due to a scam is important. Under the Code of Banking Practice banks reimburse customers for unauthorised payments where the customer hasn’t been dishonest or negligent, has complied with the bank’s terms of conditions, and has taken reasonable steps to protect their banking. The industry will work closely with the Banking Ombudsman to support a more consistent and timely response to customers who have been scammed.

“Banks will also increase resources available for initiatives to raise public awareness of scams and how to avoid them. Earlier this year the banking industry rolled out a ‘Take a sec to check’ advertising campaign to encourage people to be alert to scams. Banks also funded a television documentary commissioned by the Banking Ombudsman called ‘You’ve Been Scammed By Nigel Latta’. Banks also routinely run their own scam awareness initiatives for customers. Banks will be building on that work.”

The timing of each of these initiatives will vary depending on their complexity and feasibility.

Banks have made significant investments in fraud analytics and prevention to:

  • Identify unusual spending on credit cards and checking with customers before processing those payments
  • Warn of potential scams when customers are making payments in suspicious circumstances
  • Shut down fake bank websites and phone numbers used in scams
  • Use two-factor authentication, which allows customers to confirm they would like to action a payment
  • Provide pop-up messages in online banking and mobile banking apps to remind customers to be wary of scams, and to alert customers to activity occurring in their accounts.

Simple safety tips to help avoid scams include:

  • Stay alert – Stay on top of the warning signs of scams, and if you’re not sure take a sec to check by contacting you bank before making payments or giving any personal details
  • Be proactive – Stay safer online by using unique, long passwords and changing them regularly, and never give out your PIN or passwords to anyone
  • Report – If you suspect any scam related activity report it immediately to your bank.

More detailed information about different types of scams and how to avoid them is available in the Little Black Book of Scams: