Online Banking - protecting money is a joint responsibility
Media release
Internet Safety Group
23 July 2007
In the light of conflicting argument surrounding the internet banking section of the Code of Banking Practice (4th Ed), NetSafe wishes to advise online banking customers of some important facts.
• The Code of Banking Practice does not override an individual bank’s terms and conditions. The terms and conditions for online banking varies considerably across banks (in terms of fraud liability). NetSafe advises customers to carefully review their bank’s terms and conditions to ascertain whether their current level of security is considered adequate.
• Consumers are most likely to be defrauded by somebody they have given access to their bank account either accidentally (such as in the case of phishing attacks) or deliberately (such as might be the case with disgruntled ex-employees or ex-partners).
• Online banking is not the only online activity that may be targeted by fraudsters. Whilst banks can (and do) use advanced security technology to secure and monitor banking transactions, consumers should take steps (the Net basics) before any financial transaction online.
• All computers connected to the internet will be subjected to malicious probing. The purpose of those probes is to ascertain whether a computer is secure or not. If the computer is not properly secured, it will be considered a soft target and exposed to more aggressive hacking attacks.
• Whilst no computer is guaranteed to be secure, the Net basics will guarantee you are not a soft target. Consumers who install and update a firewall, operating system, anti-virus and anti-spyware software will be passed over by hackers (and automated attacks) in favour of those who do not.
“Keeping your money safe is and will continue to be, a shared responsibility,” says NetSafe’s Executive Director Martin Cocker. “The most effective way to prevent fraud in online banking is for consumers and banks to work together, as neither have the power to guarantee that money is protected without the support of the other.”
"If a bank stakes out an unreasonable position then consumers should vote with their feet” – says Cocker. “We also accept that the banks need some leverage to ensure customers will make a reasonable effort to protect their money. I would encourage every online banking consumer to compare terms and conditions as these define how the responsibility is shared.”
Release ends
The New Zealand Bankers’ Association has produced a code of practice that says customers who don’t make reasonable efforts to secure their PC could be liable for any resulting fraud. In response, commentators have suggested that loading this responsibility on consumers is unfair. They argue that consumers do not have access to the technology or skills to guarantee that their PC is secured.
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