Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Banking Ombudsman: accessing unsecured public Wi-Fi risky

Banking Ombudsman: accessing unsecured public Wi-Fi risky

People who store personal information, including bank account details and documents with signatures, on their email accounts put themselves at risk if they access emails using unsecured public Wi-Fi, says Banking Ombudsman Deborah Battell.

“In a recent case, an overseas couple put a six-figure sum on term deposit with a New Zealand bank only to have it stolen from the account months later. Our investigation found the theft occurred due to an unfortunate combination of the couple’s use of public Wi-Fi and because their bank’s security practices regarding emailed instructions were not sufficiently robust.

“In this case, the couple accessed their emails via unsecured public Wi-Fi at an American airport. Unfortunately their account was hacked and the fraudster found separate emails – one that included bank account details, and another with a signed employment contract attached. This ultimately enabled the fraudster to pose as one of the customers and successfully email instructions to the bank transferring funds out of the couple’s account.

“The fraudster was able to make the email look as though it had come from the couple’s address and fooled the bank into thinking it was genuine.

However, scheme investigators found the signature copied from the employment agreement was not the same as the one held by the bank. And, after surveying other New Zealand banks on their processes for emailed instructions, also found the particular bank’s practice was out of step with the rest of the industry at the time.

Some banks simply do not accept email instructions, acknowledging the risk of email addresses being hacked. Other banks accept emailed instructions, but only after verifying the request has come from their customer by, for example, calling the customer back at a number held on file and asking a series of security questions.

“It is crucial banking best practice prevails to maintain customers’ confidence. Fortunately, our enquiries have shown this to be an unusual case, and we were pleased the bank concerned moved quickly to enhance its security procedures around emailed instructions,” Ms Battell said.

Customers need to know the risks of storing documents on email, and regularly clear out information that could be used to verify their identity. It’s also a useful reminder that security questions (including those due to the new anti-money laundering requirements) and banks’ restrictions on how they accept instructions help to protect customers from fraud.

”We found in favour of the couple in this case and the bank has now reimbursed the amount fraudulently withdrawn, paid the couple interest lost following the withdrawals, and placed their total funds back on term deposit,” Ms Battell said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news