Netsafe chief executive Brent Carey says two-thirds of victims don't report online fraud to police, calls on Government to create an anti-scam centre.
Video / Alex Burton
Netsafe is joining three tech firms to offer new anti-scam online protections and recovery measures - including a new measure to match names with bank account numbers, a key pain point in fraud that involves victims unwittingly transferring money to an account controlled by scammers.
There will also be servicesto help filter out fraudulent text messages and measures to deal with crypto exchange scams.
The non-profit Netsafe is the lead agency for the Harmful Digital Communications Act 2015 and also assists in everything from privacy breaches to fraud.
It has a mix of government, commercial and philanthropic backing, with the majority of its funding coming from the Ministry of Justice and the Ministry of Education.
Its new partnership is with two interlinked Kiwi fintech firms, Akahu and Dolla - who share the same CEO and cofounder, Ben Lynch - plus US firm Cybera.
Netsafe chief executive Brent Carey said Dolla brought text message fraud filtering and blocking smarts to the partnership (features available through its smartphone app), while Cybera is a specialist in fraud recovery support and intelligence sharing, including local and international banks and crypto exchanges.
Dolla also offers payment services, including the ability - like the popular Venmo app in the US - to be used to transfer money from one bank account to another.
Americans need Venmo because, unlike NZ, they can’t make direct bank-to-bank payments through their bank’s own app. But Kiwis can benefit from Dolla which - using account details collated by Akahu - offers a “confirmation of payee” service that matches bank account names and numbers.
If a bank account name and number don’t match, it’s a red flag that a person requesting funds is a scammer.
The confirmation of payee service will allow Netsafe to investigate scams faster, enabling mule accounts to be identified and frozen more quickly to prevent further harm, Carey said.
Lynch told the Herald that Dolla also offers its payee verification service for free to people who register for its app (there are charges for various business services).
Netsafe CEO Brent Carey. Photo / Alex Burton
There is a key limitation: Dolla - via Akahu’s work as an intermediary for various accounting systems, and other sources - has access to name and number details for around six million NZ bank accounts, or roughly half the total.
And in some cases there is only a partial match, for example, only one of the names on a joint account.
Lynch said that would often be enough to give a payee confidence that an acocunt is kosher, but as things stand privacy rules mean the payee can only be told there is a partial match, not given the actual name.
Banks still assessing own payee verification service
Open banking advocate Lynch wants a system where all banks provide Akahu, and similar third parties, with the abilty to verify 100 per cent of local bank account names and numbers.
Currently, two small banks (whom Lynch won’t name) are running internal trials
The major banks are shaping up to introduce their own verification system, among other measures to address the increase in fraud.
“We’re looking at options for a confirmation of payee service to enable anyone making an online payment from one bank account to another to check the name of the account they are paying. We are investigating the technical ability to do this, along with privacy and information-sharing considerations,” New Zealand Banking Association chief executive Roger Beaumont told the Herald last month.
There is no timeline for the assessment or possible implementation of the measure.
Lynch said he had pitched the NZBA to assist in the project. “We can work collaboratively or independently,” the Akahu and Dolla CEO said. He thought it would take the banks until near the end of the year to introduce a payee confirmation system.
Akahu is majority-owned by Lynch, with Westpac-owned Red Bird Ventures holding a minority stake. Dolla is 85 per cent owned by Lynch, with minor shareholders including Icehouse Ventures, Sir Stephen Tindall and Hideaki Fukutake, son of Japanese billionaire Soichiro Fukutake, who took up residence in NZ in 2009.
How much money is lost to bank scams?
A Ministry of Business, Innovation and Employment (MBIE) survey, drawing on data from New Zealand’s 11 largest financial institutions, says Kiwis lost $198 million* to online scams in the year to September 2023, or at least those directly involving banks.
Extrapolating a survey of 1000 New Zealand adults by the Global Anti-Scam Alliance, Netsafe estimates that Kiwis lost a total of $2.05 billion to online fraud in the same period.
Both totals dwarfed the $22.5m in direct financial losses from cybercrime and fraud reported to the Government’s Computer Emergency Response Team (Cert NZ). Cert director Rob Pope said many people were too sheepish, or fearful of reputational damage, to report they had been a victim of online fraud. Pope stressed that reports were treated confidentially.
Where to turn
Victims of online fraud are encouraged to contact their bank and police as soon as possible.
Cert NZ (0800 237 869), Netsafe (0508 638 723) and the Ministry of Justice-backed IDCare (0800 121 068), which specialises in identity theft and helping you freeze your credit record, are among the agencies that can assist individuals and small businesses.
* The financial institutions that provided data for MBIE’s survey were ANZ, ASB, BNZ, Co-op Bank, Heartland, KiwiBank, Rabobank, SBS, TSB, Unity and Westpac. The figure provided covered the year to the end of September 2023. The total lost was $198,372,837.17.
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.
