14 November 2018: Banking Ombudsman Scheme honours Sir John Anderson
“We are very saddened to hear about the passing of Sir John Anderson” says Banking Ombudsman, Nicola Sladden.
“The scheme owes much to the wisdom and vision of Sir John. He was a driving force in establishing the Banking Ombudsman Scheme 26 years ago.
“He worked with consumer champions like David Russell to establish the scheme as a free and independent place for banking customers to bring their complaints. This was well before it was a government requirement for banks to belong to such a scheme.
“Sir John was a founding board member for the scheme from 1992-2005. He spoke about the scheme at its 20thanniversary in 2012:
Within the Bankers’ Association, of which I was Chair at the time, there was serious consideration given to how all the bankers could support the scheme so it was effective in protecting the interests of customers and of banks.
“We extend our heartfelt condolences to Sir John’s family. A mighty tōtara has fallen.”
ENDS
Please attribute all comments to Banking Ombudsman, Nicola Sladden
13 November 2018: Human hacking is on the rise: Kiwis being urged to stop and think
New Zealand has seen an 15% increase in scams over the past calendar year, and we will have lost $70 million to scammers by Christmas, according to high level estimates from the Banking Ombudsman for Fraud Awareness Week (11-17 November).
“Some of the cases we’re seeing are just devastating – people are losing their lifetime savings. I don’t think people realise the true extent of this epidemic,” says Banking Ombudsman, Nicola Sladden.
“A lot of people know to be wary about the classic telco call saying there’s something wrong with your internet or your computer. Or they know an email that is full of typos is likely to be a scam.
“But the scams are getting much more sophisticated than that now.
“They’re not just hacking your phone or your computer – they’re hacking you and your human emotions. They look for a way to play on your reactions so they can trick you into giving away your details or making a payment, or letting them have remote access to your computer.
“They use different tactics to throw you off guard - fear you’ve put your computer security at risk, excitement that you’ve won a prize, tempting you with a good deal, or playing on the fact that you’re in a hurry and won’t suspect a fake invoice that looks like the one you were expecting.
“Think of how a pick pocket creates a distraction so you focus on that instead of the hand in your pocket.
“This is highly organized crime targeting ordinary smart people. We’ve seen people impacted right across the community. “
Our role is to help people if they have any problems with their banking and they haven’t been able to sort it out with their bank. Banks are required to have appropriate security systems in place and inform customers about banking products and services.
“Banks are required to keep their banking systems secure. Bank systems can detect some unusual spending patterns and prevent attempts by fraudsters to access accounts. However, once a customer authorises a payment to a fraudster, it is usually gone. “
In one case seen by the Banking Ombudsman, the complainant met a man on an online dating site and all the signs indicated he was in Wellington. After talking to the complainant for two months, the man said he was going overseas to work as a mining engineer. When he arrived at his new job, he told the complainant his briefcase containing important documents and his laptop had been stolen.
The complainant bought and sent a laptop overseas. The man then started requesting money because his New Zealand currency and cheques weren’t accepted by the local banks, each time promising that he would pay her back on his return to the country. The complainant sent almost $45,000 to the scammer in total. Because of the way the complainant had been groomed into making the payments, there were no red flags to alert the bank that the payments were unusual.
“Banks will always need to keep their systems secure but consumers and businesses also need to think of themselves as a first line of defence. We all need to understand the types of threat posed by scammers, and the ways in which we can protect ourselves.”
As part of Fraud Awareness week, Kiwis are being urged toStop & Think: is this for real?
A genuine bank or organisation will never contact you to ask for your PIN, password or to move money to another account.
Never click on a link in an unexpected email or text – you could be giving access to your personal and financial details.
Always question uninvited approaches in case it is a scam. Instead, contact the company directly using a known email or phone number.
Don’t assume an email or phone call is authentic – just because someone knows your basic details (name and address, or mother’s maiden name) it doesn’t mean they are genuine.
Don’t be rushed into making a decision or financial transaction on the spot – a genuine bank or trusted organisation would never do this.
Listen to your instincts – if something feels wrong then it generally is.
ENDS
More information
The Banking Ombudsman Schemeis a free and independent service that helps people fix their banking problems. They look at what’s fair in the circumstances considering the law, codes and good industry practice. All of the main banks are covered by the scheme. So are several credit unions and building societies. You can get in touch with them for advice or information on 0800 805 950 or [email protected] or www.bankomb.org.nz. You can submit a complaint onlinehere.
Media queries to Nicola Sladden (021) 808 059 or Tina Mitchell (021) 254 4281.
Please attribute all comments to the Banking Ombudsman, Nicola Sladden.
12 November 2018: Fraud on the rise - Kiwis being urged to stop and think
Banking Ombudsman Nicola Sladden says New Zealand customers are losing almost 15 per cent more to scammers than they did last year. Provisional data from the country’s banks suggests customers are on track to lose about $70 million in fraud-related scams this year.
However, Ms Sladden says $70 million is almost certainly just the tip of the iceberg. “The true scale of the losses may never be known”.
“Some industry commentators estimate $500 million is probably a more accurate figure. A lot of scams go unreported, either because the amount is quite small, or embarrassingly large, or people feel there is nothing the banks or authorities can do to help them.”
“Banks are required to keep their banking systems secure. Bank systems can detect some unusual spending patterns and prevent attempts by fraudsters to access accounts. However, once a customer authorises a payment to a fraudster, it is usually gone. “
NetSafe is reporting scam losses that are almost five times higher than last year and that’s just from the scams that have been reported. NetSafe data shows that between January and September 2018 almost 8,000 New Zealanders reported a scam to the organisation, with more than $24.7 million lost to scammers.
The Financial Intelligence Unit within the New Zealand Police estimate $27 million in scam losses over the last 18 months. Though this figure also doesn’t represent the true total, or all of the remitting agencies in New Zealand, as these scams are grossly unreported.
One recent such case involved 78-year-old Palmerston North woman Margaret Taylor. She got a call from a man, claiming to be from telecom company Slingshot, who said someone in Wellington was using her internet connection to download pornography. Margaret asked him some questions, and he gave convincing answers. He then pressured her to quickly cut off the so-called “intruder”. She agreed and began to divulge confidential information. It was only the arrival home of her tech-savvy flatmate Leanne Warr, who realised the man was hacking into her bank accounts, that saved the day.
Margaret is not alone. Ms Sladden says the scam cases reported to the Banking Ombudsman have gone up 73% since last year (Jan-Sept).
“More and more of the cases we’re seeing are absolutely devastating for the individuals concerned. Once it was rare to see someone lose $100,000, but not anymore.
“No one can afford to let down their guard for a moment – especially not older customers who are more often victims because of their lack of awareness about the internet, current scams and what to do when they get suspicious emails, calls and offers.”
The growing size of the problem has prompted the Banking Ombudsman Scheme to commission television and radio commercials highlighting simple steps to beat scammers at their own game. The campaign will be launched during Fraud Awareness Week, from 11-17 November.
The Banking Ombudsman, Netsafe and the NZ Police are all supporting Fraud Awareness Week (11-17 November) which is led by the Consumer Protection team within the Ministry of Business, Innovation and Employment (MBIE). A wide range of public and private sector organisations are supporting it this year.
“New Zealanders are losing too much money to scams each year,” says Detective Superintendent Iain Chapman, National Manager of the Police Financial Crime Group. “By far the best chance we have of getting your money back is by helping you not to lose it in the first place.
“The reality is that despite the combined efforts of all agencies involved in financial crime in New Zealand, there are significant challenges identifying and prosecuting overseas offenders involved in online scams. This is further made worse by the fact that international funds transfers can take a matter of minutes.
“If you have family members who are not technologically savvy, now is the time to talk to them about staying safe online.”
“This year for Fraud Awareness Week Kiwis are being urged to Stop & Think: is this for real?” says Mark Hollingsworth, Manager Consumer Protection (MBIE). “In the same way that we all know to ‘drop, cover, hold’, we want people to automatically question unexpected calls and emails.
“The message is simple, if you get any online contact from anyone you don’t know, or asked for personal or financial information from anyone, including banks and government departments – be suspicious before doing anything else - stop and think.”
“Always question uninvited approaches in case it is a scam. Instead, contact the company directly using a known email or phone number” says Nicola Sladden
The key message for Fraud Awareness Week isStop & Think: is this for real?
A genuine bank or organisation will never contact you to ask for your PIN, password or to move money to another account.
Never click on a link in an unexpected email or text – you could be giving access to your personal and financial details.
Always question uninvited approaches in case it is a scam. Instead, contact the company directly using a known email or phone number.
Don’t assume an email or phone call is authentic – just because someone knows your basic details (name and address, or mother’s maiden name) it doesn’t mean they are genuine.
Don’t be rushed into making a decision or financial transaction on the spot – a genuine bank or trusted organisation would never do this.
Listen to your instincts – if something feels wrong then it generally is.
Visit thescamwatch pagefor more information on how you can prevent yourself, family and friends from being scammed.
ENDS
Media interviews
The following people are available for media interviews:
Interviewees available:
Nicola Sladden, Banking Ombudsman (can speak to increase in cases and impact on everyday Kiwis) – 021 808 059
Iain Chapman, National Manager: Financial Crime Group, NZ Police (can speak to statistics and scammers’ methodology) – 021 19 06494
Mark Hollingsworth, Manager Consumer Protection (can speak on Fraud Awareness Week, the agencies joining forces to support it, and what consumers can do to protect themselves) – 029 771 0085
Fraud Awareness Week is an annual campaign that has been running for five years and coordinated by Consumer Protection. It is a cross-government initiative aiming to get people to recognise scams before they happen. During the week of 11-17 November organisations involved will be sharing real scam examples. The theme for the campaign is: Stop and think. Is this for real?
Fraud Awareness Week is supported by:
Banking Ombudsman
CERT NZ
Commerce Commission
Commission for Financial Capability
Department of Internal Affairs
Department of Prime Minister and Cabinet
Financial Markets Authority
Ministry of Business, Innovation and Employment
Netsafe
New Zealand Bankers Association
New Zealand Police
New Zealand Telecommunications Forum
Serious Fraud Office
About the Banking Ombudsman Scheme
The Banking Ombudsman Scheme is a free and independent service that has been helping people sort out problems with their banks for more than 25 years. They resolve disputes fairly and quickly, and prevent them from happening in the first place, to make banking better for all New Zealanders.
Please attribute all comments to Banking Ombudsman, Nicola Sladden
5 November 2018: Banking Ombudsman supports greater focus on consumer outcomes
The Banking Ombudsman Scheme welcomes the report into bank conduct and culture released by the Financial Markets Authority and the Reserve Bank today.
“We support its proposals to strengthen the current framework to focus on good customer outcomes,” says Banking Ombudsman, Nicola Sladden.
“We were pleased the review found a high level of awareness of bank complaint processes amongst those surveyed.
“We agree with the recommendation that banks review their customer complaint processes, particularly to better define and record customer complaints and to ensure it is easy for customers to raise concerns.
“We have already begun a suite of initiatives to enhance our oversight of banks’ complaint processes. This is so we can be assured customers are having their concerns appropriately addressed at every level.
“Together, these initiatives will enable us to promote consistently high standards across the sector.
“We will continue to work closely with the regulators and the New Zealand Bankers’ Association to implement the recommendations to address the issues they have identified.
“A strong complaints framework is an essential element in a fair banking sector.”
ENDS
More information
The Banking Ombudsman Scheme is a free and independent service that helps people fix their banking problems. They look at what’s fair in the circumstances considering the law, codes and good industry practice. All of the main banks are covered by the scheme. So are several credit unions and building societies. You can get in touch with them for advice or information on 0800 805 950 or [email protected] or www.bankomb.org.nz.
Please attribute all comments to Banking Ombudsman, Nicola Sladden
5 September 2018: Financial advice led to portfolio imbalance
Money Week is all about helping New Zealanders get ready for life’s unexpected twists and turns. One of our cases shows the importance of staying vigilant about safeguarding your future.
Money Week is all about helping New Zealanders get ready for life’s unexpected twists and turns. One of our cases shows the importance of staying vigilant about safeguarding your future.
Kiri, who was in her 80s, met with one of her bank’s financial advisers to simplify her affairs. Kiri knew what she wanted - a low-risk, accessible investment that offered returns competitive with equivalent term deposits in order to supplement her superannuation. She also wanted to invest for less than three years, and for the bank to manage the investment.
The adviser recommended she consolidate her term deposits as they matured and add the principal on maturity to a New Zealand-based low-risk managed mortgage trust. For the next four months, Kiri invested her matured term deposits in the mortgage fund.
Two years later, Kiri discovered she was receiving a rate of return of 2 per cent a year. She complained to the bank that she would have been better off keeping her term deposits. She sought the difference in returns between the mortgage trust and term deposits.
We considered whether the mortgage trust was an appropriate product and concluded it broadly met her brief to the bank. However, we considered the mortgage trust was right for only 20 per cent of her portfolio, in what was otherwise a well-diversified portfolio. We also considered the mortgage trust should have been regularly monitored.
We considered the bank should not have recommended Kiri move all of her money from term deposits into the mortgage trust because:
term deposits are stable investments, and she had no previous experience of investments where the value could fluctuate
she was a relatively unsophisticated investor and relied heavily on advice
the extra risks were not clearly explained
the mortgage trust investment was sold without any regular monitoring process, meaning she wouldn’t know of any decline in its value and return until it affected her standard of living.
We recommended the bank compensate Kiri for the difference between what she would have received from a 20 per cent investment in the trust and what she actually received. Kiri took the compensation. She later sold her investment in the mortgage trust and reinvested the proceeds in term deposits.
Planning for your financial future can be overwhelming. If you seek financial advice, shop around until you find an adviser who takes the time to understand your financial situation and goals. Make sure the product they are recommending fits with what you need, now and into the future.
ENDS
Please attribute all comments to Nicola Sladden, Banking Ombudsman
26 July 2018: Invoice scams
We’ve seen a recent surge in invoice scams in our cases, and banks are also reporting an increase.
A Business Email Compromise scam (or invoice scam) is where scammers hack into an email system so they can email people an invoice, imitating legitimate businesses. The logo looks the same, but the numbers are different on the account. Or the scammer imitates the email address of a legitimate business, transposing one or two characters. People are busy and don’t expect to have to check these sorts of details.
“Scammers use our haste to their advantage” says Banking Ombudsman, Nicola Sladden.
Law firms and real estate agents seem to be the most common targets.
The New Zealand Law Society reported at the end of last year that invoice scams were likely affecting law firms, after similar attacks were reported in Queensland. Fraudsters obtain access to law firm email accounts, then use these to email clients misdirecting trust money or settlement funds. Conveyancing transactions were particularly popular.
Similar stories have been shared by real estate companies where home buyers mistakenly pay their deposit to a scammer. These are large sums of money and have devastating consequences for the victims.
Our advice to anyone about to pay over a sum of money is to stop and check, especially if you have not made a payment to that account before. Ring your lawyer or your real estate agent on a number you know is legitimate to double check the bank account number you are paying into.
“This is definitely a case where an ounce of prevention is worth a pound of cure” says Banking Ombudsman, Nicola Sladden.
If you think you may have been scammed, contact your bank as soon as you can. There’s no guarantee that the funds can be recouped, but the sooner you contact the bank, the better the chances of recovery.
Our role is to help people if they have any problems with their banking and they haven’t been able to sort it out with their bank. Banks are required to have appropriate security systems in place and to educate their customers about banking.
Please attribute all comments to Banking Ombudsman, Nicola Sladden
26 July 2018: Annual report to 30 June 2018
The Banking Ombudsman Scheme has released its summary annual report detailing another successful year.
“As we enter the second year of our 2017-2020 strategic plan we are really seeing the benefits of preventative model of dispute resolution come to life,” says Banking Ombudsman Nicola Sladden.
“There has been an increase in cases and timeliness, strengthened communications and stakeholder engagement, together with a drop in disputes. We are providing information and guidance to complainants and banks to empower them to resolve their disputes early on, thereby reducing overall dispute numbers.”
The scheme’s overall caseload increased by 14 per cent while dispute numbers decreased, indicating the early resolution service is working as intended.
Customer satisfaction remains high at 80 per cent. “Our working day count and timeliness performance have significantly improved.” The scheme resolved 97 per cent of its complaints within two days and improved its dispute resolution timeframes by 11 per cent.
“The scheme is successful because we can give customers fair outcomes that are more flexible than the courts.” This year 8 per cent more outcomes were favourable to customers compared with last year.
“We have continued to make an impact by sharing more lessons from our cases, strengthening our consumer and industry engagement, and engaging in a large number of policy initiatives to share a consumer perspective.”
In addition to the scheme’s resolution function, the prevention team have focused on raising awareness and accessibility of the scheme.
Based on MBIE’s two-yearly consumer awareness survey, the Banking Ombudsman Scheme is the most well-known financial dispute resolution scheme in New Zealand. “Over the last year our awareness activities have focused on audiences who may not have known about us through our usual channels.” This year the scheme launched an Instagram page,@ombuddies, targeted at youth.
“In terms of accessibility, we continued to make our service and our educational information more accessible and easier to use by putting all of our content into plain English.”
The scheme also invested in a new website which has better search functionality and is easier to navigate. Since its launch in mid-April more people are using online channels to submit their complaints and there has been a good uptake on live webchat.
Please attribute all comments to Banking Ombudsman, Nicola Sladden
26 July 2018: Key trend from cases - scams
We’ve seen more scam cases over the last 12 months, and they’re becoming more sophisticated.
Most people can tell you about a time they’ve had a phone call or email trying to trick them into handing over their bank account details. Or even a request to help a Nigerian prince receive his inheritance. And it becomes the butt of a joke…those guys are so obvious - how do people fall for that?
“Scammers are highly sophisticated. The new breed are masters of manipulation. They use fear to their advantage.” says Banking Ombudsman Nicola Sladden.
Scammers says things like - you’ve done something to your computer and people are hacking into it. Someone has downloaded a game using your wifi and now your system has a virus. You owe money to Inland Revenue.
“Scammers are now far more creative in finding new ways to engage and groom their victims. Accessing your banking details doesn’t come until much later, often hours down the track. But the end game is the same – by distracting you with terrible news, scammers quickly move on to how they can help ‘fix things’, gambling on the fact you won’t stop to check anything until it’s too late.”
Or the distraction may come in the form of good news. You’ve won a prize. You’ve been selected for a holiday. I’ve seen your profile online and I want to get in touch, but my subscription is about to end – email me!
Over thelast financial year, we’ve seen a 37 per cent increase in scam cases. That’s a significant step up. The losses are more than you would expect – often tens of thousands of dollars. Sometimes hundreds of thousands. And the impact isn’t just financial. We talk to victims every day who are too stressed and embarrassed to tell their families. Others don’t even want to give us their names.
Our advice to anyone about to click on a link or accept ‘help’ over the phone is to stop and check. Are you being manipulated?
Our role is to help people if they have any problems with their banking and they haven’t been able to sort it out with their bank. Banks are required to have appropriate security systems in place and to educate their customers about banking. They’ll also cover losses for fraud in accordance with the Code of Banking Practice.
When we saw that scam cases were increasing this year, we decided to tackle the issues head on. We were part of interagency fraud forums in November 2017 and February 2018 which brought together various experts to share knowledge and brainstorm solutions.
We had a sense from our own cases and research that seniors were losing the most. So we have made a concerted effort over the last six months to connect with government, industry and consumer organisations with a focus on seniors, especially Age Concern, Grey Power, Rotary and U3A, to share the lessons from our cases. We have also engaged with the telecommunications industry to explore opportunities to combine education messages.
With Fraud Awareness Week on the horizon later this year in November, we are leading a tv campaign to raise awareness about fraud.
“As a country we don’t talk about this enough. We need to get scam-savvy and fight back.”