Banks peel away from ‘minimum standards’ of Banking Code

Westpac promises to pay for online fraud, National Bank emphasises terms

Westpac NZ and National Bank yesterday moved to reassure internet banking customers they would not be held liable for online banking fraud, effectively distancing themselves from the New Zealand Bankers’ Association’s new online banking code.

Westpac is offering customers a guarantee they will be not be left out of pocket in the event of online fraud while National Bank quickly followed, reassuring customers its online banking terms exceed the “minimum standards” of the new code.

“In the very unlikely event that a customer incurs a loss, and they have operated within our online banking terms and conditions, the bank will not hold the customer responsible,” National Bank’s managing director of retail banking, Craig Sims, said in a statement. “In those situations, we will work with them on a case by case basis to ensure they are not out of pocket.” The internet banking provisions of the Banking Code of Practice have drawn criticism from InternetNZ and the Consumers’ Institute since Computerworld reported in June that changes would allow banks to request inspections of customer PCs before accepting liability for online fraud. National Bank’s Sims says permission for inspections could still be sought in “very rare circumstances” to understand how the loss was incurred. “But this will not determine whether we compensate the customer,” he says, reiterating that security is a shared responsibility for banks and their customers. Westpac launched its “promise to pay” claiming it is the only bank offering customers full protection in the event of online fraud. Head of E-Business Stu Woollett says Westpac introduced the guarantee “to reassure customers that we are 100% committed to protecting them from online fraud and to demonstrate the faith we have in our online security systems and processes.” The Bankers' Association is now reviewing the code and consulting industry groups as well as Computerworld and InfoTech weekly, who made a joint submission on suggested changes. Computerworld's coverage: Aussie banks deny lobbying over internet liability Banks demand a look inside customer PCs in fraud cases Podcast: Banking Code, Blackberry security and some guests Banks plan PC inspections in 'rare circumstances' only NZ net banking code attracts international comment Aussie banks reject PC inspections for fraud Forum: Bankers must revisit code of practice to restore confidence Consumers' Institute in 'impasse' over online banking code talks

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