New Zealand First has introduced the Financial Markets Conduct (Preventing Payment Scams) Amendment Bill to ensure banks are mandated to do more to protect New Zealanders from financially devastating banking scams.
"We are pleased with the progress on the Banking Inquiry into increasing Banking Competition, and that the Banking Association has come up with their own code to address financial scams." says New Zealand First MP Dr David Wilson.
"However, the current Banking Code of Practice is written 'by banks for banks' and is not strong enough."
"New Zealand First believes that self-regulation in this area is not enough."
This Bill mandates a duty to protect consumers, making the 'receiving banks' as accountable as the 'sending banks'. It requires systems like 'confirmation of payee', 'know your customer', 'urgent account freezing' for unusual activity, and 'information sharing' to prevent fraud.
"There are too many people still suffering from an international rise in organised crime groups conducting sophisticated financial scams. It is in the public interest to require up-to-date software and practices in our banking sector - they are the 'pinch point' of fraud and money laundering activity."
"The Commerce Commission has already identified that our banks have not invested in software, processes, systems and staff training at a level that is required to protect their clients."
"It is critical to require our banks to be up to date with international best practices to prevent consumers from the heartache and devastation that comes from a life changing event such as losing one's life savings when it could have been prevented."
"Even when red flags light up like a disco, banks often wait for police rather than freezing accounts, allowing funds to be wired overseas immediately".
"Crucially, if a bank fails their mandated duty under this Bill, the default starting position is that losses must not be attributed to the consumer."
"This is about bringing some common sense and desperately needed accountability of our financial institutions and the prevention of scams" says Dr. Wilson
