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Banks need to do better to fight cybercrime – Consumer NZ

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Otautahi – Consumer NZ is urging banks to raise their game and provide better protection to New Zealanders who fall victim to scams.

At least $200 million is lost to scams in New Zealand each year. Consumer NZ chief executive Jon Duffy says there is also widespread underreporting, so that number is likely to be much higher. Many of these losses are not covered by banks.

 Under the New Zealand Banking Association code of practice, banks only have to refund customers who fall victim to unauthorised payment fraud. Consumer thinks this is unfair in many cases.

“If your wallet is stolen and someone goes on a shopping spree using your credit card, this is classed as an unauthorised transaction and your bank should reimburse you.

“However, as scams become increasingly sophisticated, people are at higher risk of being lured into making authorised payments by professional scammers.

“Of course, people must take their banking safety seriously and should do all they can to avoid falling victim to scams.

“But to suggest that with so many resources at their disposal, the banks should have no responsibility to protect and refund their customers when they are scammed into authorising a transaction feels wrong,” Duffy says.

Banks are often the last line of defence between professional scammers and innocent victims.

“We know scams are getting more sophisticated, which means New Zealanders are increasingly at risk. There’s no question that banks must do better.”

Aotearoa’s consumer protection ecosystem is massively out of step with other countries. Most big banks in the UK are signatories to a voluntary code where they typically refund scam victims for their losses. Duffy would like to see a similar stance taken by the banks in New Zealand.

“We expect banks here to argue they should not be liable for their customers’ perceived mistakes – but the way we see it, right now customers are carrying pretty much all the risk in the fight against scams.

“We don’t accept the view that banks taking more responsibility will mean customers suddenly become careless with their bank details.

“Getting scammed is extremely stressful, and most people do everything they can to avoid becoming a scam victim.”

In Australia, banks have teamed up to develop a platform, enabling them to act more quickly to freeze fraudulent activity.

Recently the Australian National Anti-Scam Centre has announced an investment scam task force – which brings together representatives from the banks, telecommunications, and digital platforms to disrupt criminal activities.