Government to introduce ‘safe harbour’ law for scam takedowns

Tuesday, 18 November 2025

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The Government plans to introduce laws removing the excuses social media companies use to avoid taking down scam advertising. However, it does not intend to impose legal duties requiring them to do so — unlike the approach taken in Australia.

On Monday, Commerce and Consumer Affairs Minister Scott Simpson said the new legal protections would allow banks, telecommunications providers and digital platforms to act more quickly to block suspected online scams.

A legal protection, known as a “safe harbour”, would be introduced in an amendment to the Fair Trading Act for online service providers, protecting them from being sued by taking down fake adverts, or websites, providing they took reasonable, good faith steps to establish they were fraudulent.

The Government was also exploring the idea of a “trusted flagger” system under which regulators like the Commerce Commission Te Komihana Tauhokohoko and Financial Markets Authority Te Mana Tātai Hokohoko, and Police, could provide reliable information about suspected scams to online providers, helping them distinguish scams from legitimate activity and act with greater confidence.

Simpson said: “Entities tell us they want to pull these scams down earlier, but they worry about being prosecuted if they accidentally take down a legitimate customer or website.”

But a spokesperson for Simpson’s office said the proposed law would not include obligations or timeframes for social media platforms to remove scam adverts - some of which involved fraudsters posing as insurers or banks to target New Zealanders.

Banks have called foul on social media companies like Meta for being far too slow to respond to take-down requests.

Simpson’s announcement was made to coincide with Fraud Awareness Week.

The Ministry of Business, Innovation and Employment said on Monday that in the past 12 months, data gathered from banks showed New Zealanders had lost at least $265 million to fraud.

Of that, $126m involved authorised payments, where individuals were tricked into approving the transaction themselves, often with scams beginning with contacts on social media platforms.

The remaining $139m came from unauthorised transactions, where f accounts were accessed without the account holder’s knowledge.

Simpson said too many Kiwis were being ripped off by scams that were spread through fake websites, texts and social media.

He said the planned law change was about creating the conditions for fast, decisive action to combat scammers.

“If a bank wants to pause a suspicious payment, or a telco wants to block a fake website link in a text campaign, we want them to be able to do that promptly without looking over their shoulder,” he said.

Simpson said the work supported the New Zealand Anti Scam Alliance, a cross-sector group bringing together government agencies, banks, telecommunications providers, digital platforms and consumer representatives to prevent, detect and disrupt scams.

After horror headlines in 2022 and 2023, banks have invested heavily in fraud detection and prevention. These include systems scam victims consider should have been in place long ago, such as the newly-introduced “confirmation of payee” system that checks whether account names and numbers match for electronic payments.

A mismatch may signal that the payer is being scammed or has entered the wrong account number — risking payment to the wrong person.

On Monday, the Banking Association said banks had deployed technology to quickly identify and share intelligence on “mule” accounts.

Mule accounts are run by New Zealanders to receive the proceeds of scams in preparation for the money to be sent overseas.

“Although it’s still early days, thousands of cases of intelligence sharing have resulted in the recovery and prevented loss of millions of dollars,” the Banking Association said.

The system would help banks “freeze” mule accounts before money could be sent overseas.

From November 30 banks will have a voluntary new commitment to warn customers if they are about to send money to a “high risk” account, including a suspected mule account.

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