Summarised by Centrist
If New Zealand banks and their users can use Confirmation of Payee more widely, we can minimise the hundreds of millions lost to scammers each year, Consumer reports – so why hasn’t the Banking Association rolled out the scheme in every bank yet?
Consumer magazine reports that $200 million was lost to scammers in 2023 and that the simple solution, called Confirmation of Payee, should be able to “drastically reduce” the impact of these scams.
Confirmation of Payee flags discrepancies in payments, reducing the success of Authorised push-payment scams. In short, “customers think twice before sending a payment to a scammer.”
Consumer cites statistics showing the effectiveness of Confirmation of Payee and says 2022 Lloyds Bank research showed that transfers made to firms that were not using Confirmation of Payee were up to 100 times more likely to be fraudulent.
However, Consumer reports the NZ Banking Association hasn’t yet adopted Confirmation of Payee despite promising the service in all banks last year. The Association says it is still looking for a partner to roll out the service which is “not as simple as flicking a switch.”
Meanwhile, Commerce Minister Andrew Bayly has asked banks to voluntarily set up a reimbursement scheme for scam victims.
