Roger Beaumont, chief executive of the New Zealand Banking Association, told the committee that minor disclosure errors – “like getting their phone number wrong” – could result in the full repayment of interest and fees under the current law.

The NZ Banking Association told the committee it had been lobbying for 10 years to overturn what it argues are “disproportionate” penalties that two previous governments have declined to legislate away.

Roger Beaumont, chief executive of the Banking Association, told the select committee that between 2015 and 2019 any lender making any mistake in the information they provided to borrowers “like getting their phone number wrong” could be subject to a draconian provision in the law that “on one interpretation” could require the lender to repay them all the fees and interest they had charged until the mistake was fixed.

Importantly, the proposed amendment to the law does not stop consumers or regulators taking action against lenders for information disclosure breaches. Nor does it stop any cases currently before the courts. It merely confirms that the courts should apply a ‘just and equitable’ approach. It would be up to the courts, as it should be.

Here, banks are already chipping in to the cost of preventing or managing a future crisis, he suggests. The Reserve Bank is raising banks’ capital requirements to “among the highest in the world” and the country has just brought in a depositor compensation scheme, paid for by the banks, to help protect people’s bank deposits, he notes.

“We’ve been calling for a co-ordinated multi-sector approach to scam prevention and consumer protection since 2023,” said NZBA chief executive Roger Beaumont.

Banking Association chief executive Roger Beaumont says it will make a difference if all participants play their part. He says particularly social media companies and digital platforms need to do what they can to interrupt scams.

The New Zealand Banking Association today welcomed the government’s establishment of the Anti-Scam Alliance.

New Zealand Banking Association chief executive Roger Beaumont says: “We’ve been calling for a co-ordinated multi-sector approach to scam prevention and consumer protection since 2023. Today’s announcement is a good step in that direction.

“For a long time we have encouraged other sectors involved in the scam ecosystem to do more to prevent scams because banks cannot fight scams alone. There’s a clear role for government to co-ordinate other sectors’ anti-scam efforts. Scams typically start when people are deceived by fake websites and search engine results, fake emails, texts, social media ads and chats, and phone calls, so there’s a role for telcos, social media companies, and global tech platforms to help stop them in the first place.

“Our banks have significantly stepped up ways to help prevent scams and protect their customers.

“In April this year we finished rolling out a Confirmation of Payee service across 13 retail banks to help customers check that the name of the person they are paying matches the account number. This can stop mistaken payments and avoid payments to scammers.

“We have also recently announced a suite of other scam prevention measures that will be included in an update to the Code of Banking Practice later this year. In addition to Confirmation of Payee, banks will commit to providing pre-transaction warnings for certain payments, identifying high-risk transactions, providing a 24/7 scam reporting channel, and sharing with other banks information about accounts used by criminals. Where banks fail to meet those commitments, they will compensate all or part of the loss for eligible customers.”

ENDS

“Banks cannot fight scams alone,” he said. “Scams typically start when people are deceived by fake websites and search engine results, fake emails, texts, social media ads and chats, and phone calls, so there’s a role for telcos, social media companies and global tech platforms to help stop them in the first place.”

“At first glance, it appears to be more of an issue for retailers, many of whom no longer accept cash for security reasons and the costs of handling it.”