Code of Banking Practice changes take effect after 30 November go‑live
New scam protections and compensation rules for New Zealand retail bank customers are now in force, following the 30 November go‑live of changes to the Code of Banking Practice.
The update introduces five new scam‑protection commitments, mainly targeting authorised payment scams where people are tricked into sending money to criminals.
Five new protections under the code
The retail banks’ new consumer protections 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 (this finished rolling out in April)
- Identification of and response to high‑risk transactions or unusual account 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
Where a bank fails to meet the five new scam‑protection commitments, it will 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.
Earlier in November, banks also deployed new fraud‑intelligence technology to speed up detection of “mule” accounts, warn customers before they pay known high‑risk accounts, and recover stolen funds more quickly through cross‑bank information‑sharing, at a time when BNZ research shows AI‑driven scams are making Kiwis more cautious online.
NZBA: prevention‑led, shared‑responsibility approach
New Zealand Banking Association chief executive Roger Beaumont (pictured) said the new commitments underline how seriously banks are taking the scam threat.
“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.
“The new compensation approach recognises 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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