Working to improve internet and phone banking security

10 March 2005
Consumer Affairs Minister Judith Tizard has met with the Banking Ombudsman and Ministry of Consumer Affairs officials to discuss steps that can be taken to improve security for internet and phone banking services for consumers.

Recent cases of illegal access to consumers' bank accounts has highlighted the need for bank customers to ensure they have up-to-date security protection on their computers.

“Consumers should be particularly careful if they are accessing their bank account at an internet cafe or on a computer where they do not know the level of security protection available,” says Judith Tizard.

“Banks and consumers also need to be mindful of the balance between convenience and security. Banks should take every step to advise their customers about the necessary precautions they ought take to protect themselves.”

While there is a lot of publicity about internet and phone banking fraud, consumers also need to be aware that they more likely to be exposed to fraud and the risk of illegal access to their bank accounts by other means, such as unauthorised use or theft of their credit cards, or cheque books stolen from their mail.

Banks are taking steps to ensure that their customers are protected from internet and phone banking fraud.

“Where consumers have lost money through internet or phone banking fraud and have been unable to resolve the issue with their bank, the Code of Banking Practice allows the consumer to take a case to the Banking Ombudsman to seek compensation for their problem.

"The New Zealand Bankers' Association is about to commence a review of the Code. I will be strongly encouraging the Association to look at the issue of internet and phone banking in the review, so that these banking services will be given the same status as other forms of electronic banking, such as ATMs and EFTPOS.

"I look forward to the review of the Code taking into account these issues and providing a more up-to-date approach to consumer protection in the banking sector that recognises the range of banking services consumers want to access with confidence," said Judith Tizard.