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Westpac Bank has promised online banking customers they will never be left out of pocket if they fall prey to fraudsters - despite industry moves to shift liability on to customers.
The bank yesterday gave a "promise to pay" guarantee to its online customers.
The move follows the
introduction of a new code of practice introduced by members of the New Zealand Bankers' Association last month, which says customers could find themselves liable if they are defrauded and don't have up-to-date software.
Under the code, banks also reserve the right to access a customer's computer to check its software, something Westpac said it would not be doing.
Several submissions have been made seeking clarification and changes to the code, amid concerns the banks have shifted liability to customers.
Westpac E-business head Stu Woollett said its online banking terms and conditions had been simplified to support the new guarantee, which came into effect yesterday.
"We've been concerned that confusion around responsibility, liability and security are undermining what is, in many respects, the way of the future for banking. Feedback we've had from customers is that some are not sure what they should be doing, not just to be safe but to feel safe."
He said there was concern around thedifficulty for the average person to maintain up-to-date computer security applications.
He said the new terms and conditions made it clear that customers would be reimbursed as long as they didn't knowingly use a computer with malicious software, didn't leave their computer unattended and protected their password by not writing it down or sharing it with anybody.
Banking Ombudsman Liz Brown said yesterday anything that added clarity over the question of responsibility for internet transactions was very helpful.
"It's a very good move because it makes it very clear what the rights and obligations of Westpac customers are. The thing that has come out of the debate over the content of the [new code] is that people weren't certain what sort of standard they had to observe before their banks would agree to carry the risk of unauthorised transactions."
Other banks contacted yesterday said they wouldn't be following Westpac's move.
BNZ said it would continue to take the position that it would reimburse genuine victims of online fraud.
Kiwibank said its policy was to reimburse unless the customer was actively involved in the fraud. "That's our policy but we haven't made a big statement about it," it said.
ANZ said its commitment to doing what was right for its customers was unchanged.
"We work one-on-one with our customers to ensure they are compensated if they follow our terms and conditions and they incur a loss through no fault of their own," it said.
ANZ said it would be extremely rare to ask permission to look at a customer's software - and only then it would be to understand how a loss incurred.
ASB said, like other banks, its terms and conditions took precedence over the Banking Code of Practice. It said it had never refused a claim from anybody who had lost money to online fraud.
InternetNZ said Westpac's move contrasted dramatically with the new code of practice. "Westpac's move throws down the gauntlet to all banks to go beyond the minimum requirements outlined in the [code]. It will be interesting to see if other banks will join Westpac in reassuring the public through similar or equivalent online banking initiatives and through revision of the Banking Code of Practice."
