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Banks' moves to introduce confirmation of payee service awaited as fintech Akahu moves ahead

Banking / news
Banks' moves to introduce confirmation of payee service awaited as fintech Akahu moves ahead

Bank lobby group the New Zealand Banking Association (NZBA) says it'll provide an update in mid-December on the industry's commitment, made in September, to a range of measures designed to combat scams and frauds being committed against bank customers.

Against the backdrop of significant pressure to act, NZBA pledged banks would; instigate an industry wide ‘confirmation of payee’ account name checking service, remove all weblinks from texts to customers, work together to combat ‘mule’ accounts, investigate the sharing of real time information between organisations impacted by scams, and support the establishment of a centralised, co-ordinated, multi-sector national anti-scam centre.

A spokesman told on Thursday NZBA is "looking to provide an update in mid-December."

This comes with Josh Daniell, co-founder of fintech Akahu Technologies, announcing it has; "built a confirmation of payee service that has taken inspiration from these services in the UK and Nordic countries."

"Dolla is the first payment provider in New Zealand to implement confirmation of payee functionality," says Daniell. 

"We've had one New Zealand bank begin a trial with Akahu's confirmation of payee service, and are offering to work with other banks that want to get started quickly. As a first phase, the 'match', 'close match', or 'no match' results can be used internally by fraud teams to help prevent customer harm. Once the implementation is working well internally, the bank can start to display the results to customers."

Red Bird Ventures, Westpac NZ's venture capital fund, owns 37.1% of Akahu.

"Outside of the banks, Akahu will continue rolling out our confirmation of payee service to apps that provide payment functionality via Akahu," Daniell says.

The big five banks - ANZ NZ, ASB, BNZ, Westpac and Kiwibank - all referred questions on confirmation of payee to NZBA.

Banks have been under pressure for failing to plug systemic gaps in their systems, including the ability for people to check the names and account numbers they make payments to match. The United Kingdom introduced name and account number checking, or confirmation of payee, in 2020.

Critics say NZ banks refusal to plug these gaps mean NZ is seen as a soft touch by scammers, using sophisticated schemes including mock websites and detailed investment pitches to trick people into paying out sometimes hundreds of thousands of dollars.

In August a Parliamentary committee recommended NZ banks adopt confirmation of payee, ratcheting up the pressure on the industry further.

Meanwhile, Stuff reports banks and telecommunications companies have put a plan into action that aims to stop overseas scammers pretending to be from bank call centres.

Earlier this month the Ministry of Business, Innovation & Employment (MBIE) said nearly $200 million was lost to scams during the year to September, an annual increase of just over 8%. And in September the Banking Ombudsman said almost a third of its annual investigations related to scams, in which victims' average losses were $57,000.

In September NZBA also said its members would work towards more consistent and timely outcomes for customers who suffer financial losses, and drive further public awareness of scams and how to avoid them.

"The timing of each of these initiatives will vary depending on their complexity and feasibility," NZBA said.

*ANZ NZ on Thursday said it was urging customers to be vigilant after receiving increased reports of cold calls by scammers impersonating ANZ staff or pretending to be from the ANZ fraud team.

 ANZ says it will never ask customers; for their banking passwords, PINs, or two-factor authentication codes, for their credit card details,  to transfer money to a 'safe' account, to purchase gift cards or set up a crypto currency account, or to download software or allow remote access to the customer’s device.

"ANZ continues to work closely with the telecommunications industry on ways to protect New Zealanders from criminals looking to exploit the services we provide to scam our customers," the bank says.

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