Code update addresses approach for retail banks to compensate losses
The New Zealand Banking Association (NZBA) has called attention to an update to the Code of Banking Practice, which has introduced additional protections against banking scams as well as a new compensation approach upon going live on 30 November 2025.
NZBA explained that the update adds customer scam safeguards for retail banks to target authorised payment scams that trick individuals into paying criminals and a new approach for banks to compensate for losses.
According to NZBA’s media release, the new protections cover:
“The five new scam protection commitments in the updated Code of Banking Practice show that our banks are serious about helping to keep their customers safe from increasingly sophisticated scams,” said Roger Beaumont, NZBA chief executive, in the media release. “They’ve invested heavily in this.”
Beaumont added that the five new safeguards represented a prevention-focused approach to combating scams, given that worldwide experience has demonstrated that prevention is the most effective way to protect against scam losses.
In its media release, NZBA noted that a bank falling short of complying with the five new scam protections should compensate eligible customers for all or part of the losses. NZBA added that banks should continue compensating losses for eligible customers if somebody accessed their banking without the customer’s authority.
Beaumont said the new approach to compensation of losses acknowledged shared responsibilities for keeping New Zealanders safe from scams
“Banks have stepped up their customer protections and will be accountable for those measures, but they cannot take on full liability for scam losses that are beyond their control and may start with a fake ad or chat on social media, or a fake search engine result,” Beaumont said in the media release.
“Industries such as social media companies, global tech platforms, and telcos also have a major role to play in preventing scams,” Beaumont added. “Consumers are also encouraged to take reasonable care to protect their banking.”
According to information from NZBA’s website, the Code of Banking Practice provides good banking practice principles in an effort to help banks form positive relationships with customers and help customers have a positive banking experience.
