Banks issue caution over online banking fraud in POLi system

ASB technology and innovation manager Russell Jones said the bank did not recommend the use of POLi. Photo / Thinkstock

Internet banking fraud guarantees in jeopardy if customers give login details to third party.

Internet banking customers using a popular online payment system are being warned by banks that they might not be covered if fraud occurs.

POLi, owned by the Australian Government's Australia Post, is offered to customers using the Transport Agency website as well as those of businesses including Air New Zealand and The Warehouse.

It allows users to make one-off direct payments to merchants by logging into their internet banking. It has been around for about eight years.

Kiwibank spokesman Bruce Thompson said by giving internet banking login details to any third party, customers could jeopardise the bank's guarantee to make good any losses from internet banking fraud.

"In relation to a provider such as POLi, we have concerns with the process they follow to complete their payments.

"Fundamentally, their process is to obtain customer information [access numbers and passwords] and make the payment via their own systems.

"This increases the risk to our clients and to Kiwibank as we are unable to ensure that the customer information has been handled with the appropriate level of security."

Mr Thompson said the bank reviewed each case of fraud on its own merits.

BNZ spokeswoman Grace Honney said the bank would stand by its customers in the case of fraud, but advised people against giving their login details to a third party, which could be a breach of the bank's terms and conditions.

Ms Honney said BNZ's promise to reimburse clients who were victims of internet banking fraud did not override customer responsibilities.

ASB technology and innovation manager Russell Jones said the bank did not recommend the use of POLi.

ANZ spokesman Stefan Herrick said the bank encouraged customers making transactions online to use internet banking or the goMoney app.

A Westpac spokeswoman said the bank had no specific policy regarding POLi.

POLi spokesman Jeff Skidmore said there had never been a breach of security or a disputed transaction in New Zealand.

He said transactions were processed on banks' systems and therefore it would be a bank's responsibility to reimburse the customer if fraud were to occur.

"Our terms and conditions clearly state that we do not provide consumer protection," Mr Skidmore said.

Air New Zealand has offered POLi as a payment option since May 2009.

A spokeswoman said it used POLi as a "viable alternative" for people who did not want to use credit or debit cards.

A spokesman for the Transport Agency said it had offered POLi to customers for more than six years, and no security incident had been reported.

A spokeswoman for The Warehouse said the company had offered customers the POLi payment option online since December 2010.

"We are confident in the security of all the payment methods we offer, including POLi."

What is POLi?

POLi is a way of making a one-off payment using your internet banking.

Where can I use it?

POLi is available to make payments to NZTA, The Warehouse, Air New Zealand, AUT University, the Hutt City Council and many others.

Why should I use it?

There is no need to register - all you need is access to internet banking. A credit card is not required - meaning consumers can avoid surcharges.