[LINK] NZ Passes Liability for Insecurity to Consumers
Roger.Clarke at xamax.com.au
Tue Jul 3 11:34:15 EST 2007
[NZ's slack-and-idle regulator has permitted NZ banks to impose
increased liabilities on consumers for ePayments that go wrong.
[The consumer movement in Australia is fighting hard to make sure
that the Australian banks don't get away with such nonsense, as ASIC
reviews our Code here.
Online fraud targeted
July 3, 2007
Next Section of SMH and Age
Companies at the frontline of the fight against computer-enabled
fraud are trying new ways to curb this growing threat.
Banks in New Zealand may no longer automatically reimburse victims of
internet banking fraud if their computers are found to be insecure
and eBay has revealed it sent fraud investigators and computer
equipment to Romanian law enforcement agencies in an attempt to curb
the country's high fraud rate.
Until now, banks have reimbursed the victims of internet banking
fraud. However, under New Zealand's new banking code of practice,
which came into effect on Sunday, financial institutions will reserve
the right to conduct a forensic analysis of fraud victims' computers.
If the system lacks operating system updates and security software,
they may deny reimbursement claims.
"The code clarifies responsibilities," Bankers' Association chief
executive Alan Yates says. "The customer has a responsibility to keep
their identity and information safe. (They) may be liable if they
breach the banks' terms and conditions."
Consumers will also forfeit compensation if they "negligently"
disclose their PIN or internet banking details.
However, Mr Yates argues the code is not a radical departure from
existing policy: "Banks have in the past willingly compensated
victims of fraud; there's no intention to change that practice."
The Australian Bankers' Association considered endorsing a similar
code in June, but decided against it. "It is very important for our
bank customers to have faith in the security of the system, and for
that reason we have stuck with our existing position," the ABA's
chief executive David Bell says.
Meanwhile, eBay is training Australian police in online fraud
investigation techniques. The company hosted a series of workshops in
Sydney last week, attended by 48 law enforcement agents.
Matt Henley, senior manager of eBay's Technical Investigations and
Analysis Group in the US, says more and more of his investigations
led to Romania. "We decided as a company to form a team to address
Many Romanian law enforcement and court officers were not computer
literate. "It was an open environment where (criminals) could go in
and commit these crimes without any recourse because the people that
are responsible for going after them just did not have the ability to
understand the crimes," Mr Henley says.
Computer-literate police often had to conduct investigations from the
same internet cafes used by criminals to commit online crimes.
Over three years, the company trained police and donated computers
and internet connections to police stations. eBay claims its
initiative in Romania has resulted in hundreds of arrests.
Companies affected by fraud are reluctant to disclose fraud figures.
eBay's director of trust and safety and former AFP officer Alastair
MacGibbon claims this is partly because the media sensationalises
"Spurious figures get such a good run," he says. "All that cuts
through is some alarmist figure. You put the words 'internet' and
'crime' in one sentence and people become irrational. You cannot get
any semblance of equal or fair discussion."
He says eBay's survival and growth prove fraud is a minor issue and
the level of fear around internet crime is disproportionate to the
However, official figures suggest online fraud is growing. A
stockmarket filing published by US-based share trading company
E*Trade in November, 2006, showed the company's online fraud-related
losses increased 97 per cent to $US45.7 million ($A53.8 million) and
55 per cent to $US101.9 million for the three and nine months ended
September 30, 2006, respectively, compared to the same periods in
Roger Clarke http://www.anu.edu.au/people/Roger.Clarke/
Xamax Consultancy Pty Ltd 78 Sidaway St, Chapman ACT 2611 AUSTRALIA
Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au http://www.xamax.com.au/
Visiting Professor in Info Science & Eng Australian National University
Visiting Professor in the eCommerce Program University of Hong Kong
Visiting Professor in the Cyberspace Law & Policy Centre Uni of NSW
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