He has just sent invites to the heads of telcos, banks and social media firms for a meeting with himself and top enforcement and government agency heads on December 6.
“I’m going to get them all in the same room and the discussion will be around, ‘What are the gaps now?’”
Bayly said individual sectors were making progress, such as banking, where a confirmation-of-payee system will be established between the end of this month and Easter to match names with account numbers when money is transferred.
But there needed to be mechanisms put in place for “real-time digital sharing” within “portals” – sectors such as banking, telecommunications, social media platforms and Government agencies – and between the portals.
The Aussie approach
There is already a model across the Tasman where, in May last year, the Australian Government allocated A$53 million ($58m) to fund the setting up of the National Anti-Scam Centre over the next two years. The centre will co-ordinate action and data-gathering on scams between various law enforcement agencies and the likes of banks and telcos. The first phase of data integration was completed in June this year.
The Australian Anti-Scam Centre sits under the ACCC – the equivalent to our Commerce Commission.
Bayly said he had visited Australia and Singapore to investigate the anti-scam centres set up in each country. He had met with ministers in both countries – including Assistant Treasurer and Minister for Financial Services Minister Stephen Jones, who is in charge of the ACCC’s anti-scam efforts and who on November 7 was given new powers to enforce scam-prevention codes on specific industries, like banking, complete with fines of up to A$50m for non-compliance.
Jones will be visiting New Zealand to continue discussions with Bayly, but Bayly said while co-ordination between Singapore, Australia and New Zealand will get tighter, New Zealand won’t necessarily be copying the Australian approach.
“We don’t have to hire 500 people and put them under the same roof [in an Anti-Scam Centre],” Bayly said.
“What we need to put in place is seamless digital communication within portables and across the portals,” he said.
“What I want is to get everyone in the room [on December 6] to work out the landscape. For everyone in the room to summarise their position, what they’re doing, what they’re doing in their own business, and how they’re co-ordinating. And then for us at a strategic level, how to work better – what is the best organisational structure we put in place? What do we need to make that happen?”
Compo, fines?
Bayly has also been pushing banks to be more proactive in compensating victims, where red flags should have been raised in “authorised” bank-to-bank transactions involving fraud. There was no update on that front today. Bayly has previously said he wants a compensation framework to be industry-led.
“We are discussing [the] next steps,” New Zealand Banking Association head Roger Beaumont told the Herald.
Would Bayly consider penalties on the scale of Australia’s A$50m for non-compliance with a sector anti-scam code?
“This is something I would like to talk to ... Jones about when he comes in December,” Bayly said.
‘Fallen between the cracks’
“Online financial scams are a growing problem for New Zealand. New data released today shows Kiwis lost nearly $200m in the last year to scammers. Considering estimates suggest only one in five scams are reported, the real losses to New Zealanders are significantly higher,” Bayly said in a speech this morning to kick off Fraud Awareness Week.
“Tackling online financial scams is part of our plan to rebuild the economy by supporting Kiwis to safely transact and do business online.
“The fast-evolving nature of digital technology and the complex nature of online scams, with most originating offshore, means that scam detection, prevention and response has fallen between the cracks of industry and Government.
“There is no centralised, instantaneous method for reporting, which hampers our ability to respond quickly. Similarly, the focus has largely been on closing down individual scams, rather than developing systemic solutions,” Bayly said.
“There is a lot of good work already going on to prevent and respond to scams, but it is soiled, disjointed and, in many cases, unsophisticated.
“The focus has largely been on closing down individual scams, rather than developing systemic solutions.”
Banking Ombudsman: Complaints on the rise
“We have been calling for stronger action and for better coordination between government, public agencies and the banking and telecommunication sectors to prevent scams,” Banking Ombudsman Nicola Sladden said.
“Today’s announcement is an important step towards greater cross-sector collaboration to stop scams before they start and help put things right quickly and fairly when scams do occur.”
“The Banking Ombudsman Scheme is receiving over 70 scam complaints a month and behind each of these cases is a story of financial loss and emotional trauma. The financial sums lost are often in the thousands and are lifechanging for many – the psychological impact can be profound.”
Since July 1, 2024, the scheme has received over 300 scam-related complaints, 14% higher than the same period a year earlier, Sladden said.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
