Banking Ombudsman says scams surging, cost-of-living crisis a worry for many customers

It’s becoming harder to work out what is real and what is fake, the Banking Ombudsman says. Graphic / Herald Artists

Social media companies and other groups should do much more to tackle a surge in scams, the Banking Ombudsman says.

“We are concerned that it takes far too long to get some of these scam websites taken down and think that needs to change urgently,” ombudsman Nicola Sladden told the Herald as the scheme released its annual report.

“We think that the digital platforms have to step up and invest in the prevention of scams. At the moment many scams start through advertisements that are hosted on one of these platforms.”

Scammers were becoming increasingly good at copying the websites and letterheads of legitimate banks, Sladden said.

“It’s becoming harder to work out what is real and what is fake.”

The ombudsman’s annual report, released today, said overall disputes were up 31% and scam complaints rose 27% on the previous year.

Apart from scams, other complaints to the ombudsman related to people struggling with the cost of living reporting banks being non-responsive to requests for relief, Sladden said.

“A typical example is someone who’s struggling contacts their bank for support and the bank isn’t able to assist.”

Asked if desperate people who got no response from their bank might turn to loan sharks or other unscrupulous operators, she said: “That is a concern ... If the consumer is unable to get assistance from their bank, we follow it up with them.”

Sladden said the average loss from scams the scheme investigated rose sharply, from $57,000 last year to $80,000 this year.

Investment scams caused the steepest losses for customers but phishing scams were also widely reported.

Unauthorised payment scam cases also rose.

Those scams involved con artists tricking customers into sharing banking credentials with criminals.

Sladden said banks and other organisations, including telcos, should take more coordinated action to fight scams, with a cross-sector approach crucial to theprevention of scams.

And since many scams operated across international borders, a multilateral approach was also needed.

“There are some domestic scams but most are driven internationally.”

Sladden said anybody could be a scam target or victim.

“Year-on-year we have seen a massive increase in scams and frauds and they’re just becoming more and more sophisticated.”

Banks received more than 98,000 complaints during the year, according to the scheme, which collates complaint data on behalf of banks and updates the results on its website.

Problems with service accounted for almost half of all complaints. Complaints about delays, queues and waiting times were up 9%.

Earlier this year, NZ Banking Association chief executive Roger Beaumont urged telcos and social media platforms to take down fake websites.

He said banks were usually “at the end of the scam chain” and needed help to effectively crack down on scams.

Earlier today the Herald reported an Australian family whose disabled son lost about $250,000 in an investment scam after wiring the money to a New Zealand mule planned to sue two major banks for alleged failings and “gross negligence”.