Banking review may revive fraud debate
Banks will risk reopening old sores over internet banking this year when they overhaul a code of practice that sets out people’s rights when dealing with the banks.
An earlier review in 2007, ran into controversy when banks tried to water down the guarantees they had provided to foot the bill for internet banking frauds. They backed down in the wake of media and consumer pressure.
The last revamp of the voluntary bank coding, in 2012, introduced some fudges over who should carry the can for fraud losses.
The existing code states as a ‘‘guiding principle’’ that banks will continue the practice of
Customers could be liable for losses if they write down their passwords
reimbursing all customers who are genuine victims of internet banking fraud.
However, it also says customers could be liable for losses if they write down their passwords or access internet banking using a device they know doesn’t have ‘‘reasonably up-to-date’’ protective software and operating system..
When banking using a smartphone, consumers are required to lock their device or take ‘‘other steps to stop unauthorised use’’.
Other conditions include that customers change their passwords regularly, though it is not clear whether failing to do so could in itself leave them responsible for fraud losses.
Massey University banking expert David Tripe, said the fine print had not caused problems for consumers in practice.
‘‘I think the real concern is that somebody might try to use the code as a justification to rip the banks off,’’ he said.
That could happen if someone made a false claim and pocketed the reimbursement.
Bankers’ Association spokesman Philip van Dyk said the association was talking to members and others before taking a draft out to public consultation.