NZ banks’ terms & conditions for handing customer data to the police

Nicky Hager’s lawyer Felix Geiringer  asks: What do New Zealand’s leading banks say in their terms and conditions about handing their customers’ data to Police and other Govt agencies?

They say they will hand over customer to data in breach of Privacy Act. Westpac have apologised to Hager and have promised to change their terms

But the other major banks have made vague assertions that they will not breach customer privacy but still have dodgy terms, and have not made a commitment to change their terms to comply with the law.

Regardless of views about Hager’s use of hacked data, this is an important issue for everyone.

Via Twitter @BarristerNZ:

There has been significant publicity over Westpac’s decision to hand Nicky Hager’s data to Police. But this issue was never limited to Westpac.

A study conducted by the OPC in 2015 suggested that our financial institutions might have been releasing to Govt the data of close to 10,000 customers per annum without a warrant / production order.

Possibly close to 10,000 customers each year! And this appears to have been happening for over a decade.

Plus, all our banks, not just Westpac, had entered into a written agreement with NZ Police to give over customers data without warrants or productions orders.

Basically, all our banks promised Police that they would breach the Privacy Act if Police asked them to. And it looks like Police may have made many thousands of such requests.

Westpac said to Hager that its terms permitted the release. The OPC rejected the argument that those terms could be relied upon. However, Westpac terms, on their face, did set a much lower bar for releasing data than our Privacy or Search and Surveillance legislation.

Westpac have apologised for its breach, and it has also promised to change its terms. There will now be an enforceable contractual promise from that bank to customers that it will not do this again.

What about other banks?

I am told that in answer to journalists’ questions some other banks have made vague assertions that they will not breach customer privacy. But what do their terms actually say?

Kiwibank’s terms are very similar to the ones Westpac had at the time of the Hager release.

Kiwibank’s terms assert that, by banking with it, you authorise it to release your data to Police whenever Kiwibank thinks it will help Police with an investigation.

That test bypasses the protections that parliament has put in place which limit releases to circumstances where Police can objectively establish reasonable grounds to believe the data is evidence of a crime.

ANZ’s terms are almost the same again, arguably even looser. It says that by banking with it you agree that it can give your data to Police if it believes that doing so will help prevent crime.

ASB’s terms are more open to interpretation. It can release data to Police when required to by law. There can be no objection to that. But it can also release data in a variety of other circumstances.

ASB’s terms define the purposes for which it is holding your data to include to “investigate illegal activity”. The terms allow release to 3rd parties for this purpose. However, the Govt isn’t expressly listed as one of those 3rd parties.

If the list of 3rd parties in ASB’s terms is read as a closed list, it arguably has the best terms. If it is not read as a closed list, then it has one of the worst terms.

BNZ’s terms are clear, and are clearly the worst of those discussed here. Its terms claim that you have authorised it to share your data with Police or other Govt agencies for the purpose of detecting any crime.

The circumstances of release permitted by BNZ’s terms are astoundingly broad. Those terms have little regard for the duty to protect the secrecy of BNZ’s customers’ information.

I haven”t analysed TSB’s terms.

So, there you have it, and I think that this raises serious questions. We know the NZ banks were doing a very bad job of protecting our private data. They say they are doing better now, but are they?

And, if these banks are now not handing over data to Police without a warrant or production order, why is this still not reflected in their terms?

Principle 11, Privacy Act 1993 – 6 Information privacy principles: Limits on disclosure of personal information

 

Kiwibank ownership changed

NZ Post has sold nearly half of it’s shares in Kiwibank to two other Crown entities, the Super Fund and ACC.

The NZ Super Fund and the Accident Compensation Corporation’s purchase of minority stakes in Kiwibank has been welcomed by Finance Minister Bill English and State Owned Enterprises Minister Todd McClay.

“The deal keeps Kiwibank in public ownership and gives the bank access to additional sources of capital,” Mr English says.

“It also returns a dividend of about $200 million to the Government which can be used for other high priorities.”

Under the terms of the deal, NZ Post has sold a 25% shareholding in Kiwibank to the Super Fund and a 22% shareholding to ACC. The remaining Kiwibank shares are retained by NZ Post.  NZ Post, the NZ Super Fund and ACC are all owned by the Crown.

Mr McClay says the deal recognises that the business operations of NZ Post and Kiwibank are at very different stages of development.

“The transaction will result in a greater separation of NZ Post’s and Kiwibank’s operations and will allow the boards and management of both businesses to focus on their respective markets.”

Green co-leader James Shaw responded:

The privatisation of Kiwibank starts today with a 47% sale to ACC and Super Fund.

would have invested $100 million directly in Kiwibank meaning we’d still own it in 5, 10, 20 years’ time…

https://www.greens.org.nz/policy/smarter-economy/kiwibank-can-get-low-rates-all-us

NZ Post selling part of Kiwibank

NZ Post Chairman Michael Cullen announced today that NZ Post wants to sell 45% of Kiwibank. That’s a similar proportion to the part asset sales of the power companies in the last term.

Stuff: NZ Post to sell 45 per cent of Kiwibank for $495m cash injection

Troubled state-owned New Zealand Post is selling 45 per cent of Kiwibank, 25 per cent to the New Zealand Super Fund and 20 per cent to ACC.

The deal values Kiwibank at $1.1 billion, NZ Post chairman Sir Michael Cullen said. Both entities are owned by the New Zealand government.

If the sale goes ahead, NZ Post will receive $495 million for its stake.

So that’s still public ownership but with shares being sold to investors the Super Fund and ACC.

John Key is in favour.

Prime Minister John Key said it was good solution

Key rejected suggestions it was a compromise to get around the Government’s opposition to further selling off of state assets.

Labour seems to be backing it too:

Labour leader Andrew Little said it was important Kiwibank stayed in public ownership.

“And this does that, there are some good conditions around it,” he said.

“This provides a way to get extra capital from these sovereign wealth funds, and hopefully for NZ Post to use the funds that they raise from the sale, to put more capital into Kiwibank.

Meanwhile, Labour Party state-owned enterprise spokesman David Parker said Cullen should be congratulated on the idea.

“Michael Cullen should be congratulated for securing a route to expand KiwiBank and keep it in public ownership, given the refusal of National to provide more capital for NZ Post or KiwiBank.

Greens have more concerns:

Green Party co-leader James Shaw said the move opened the door to partial privatisation.

“This deal makes it harder for the Government to use Kiwibank to drive competition in the banking sector, as the Green Party announced we’d do, because the Government can’t direct the Super and ACC funds in the way it could have directed Kiwibank,” he said.

“The fact is the Government forced Kiwibank’s hand and today’s announcement will make it easier than it was before to move Kiwibank into private ownership.”

But Cullen…

…said Shaw’s argument, that the Government was able to direct Kiwibank, was “completely incorrect”

“Kiwibank is a 100 per cent owned subsidiary of New Zealand Post but in terms of the Companies Act and Reserve Bank requirements it must act independently in terms of its activities.

“The Government cannot direct New Zealand Post, nor through New Zealand Post can it direct Kiwibank.”

And the person who made Kiwibank happen, Jim Anderton via Newshub:

Founder of Kiwibank, Jim Anderton believes the move to sell 45% of New Zealand Post shares in Kiwibank was the best option available.

So part from the Greens it looks like there will be little opposition.

Greens want to ‘repurpose’ Kiwibank

James Shaw announced a Green policy to “repurpose Kiwibank and save Kiwis hundreds of millions”:

The Green Party will strengthen Kiwibank so that it can compete with the big four foreign owned banks leading to better interest rates, the Green Party said today.

To achieve better bank interest rates, the Green Party will:

  • Inject a further $100 million of capital in Kiwibank to speed its expansion into commercial banking;
  • Allow Kiwibank to keep more of its profits to help it grow faster; and,
  • Give Kiwibank a clear public purpose to lead the market in passing on interest rate cuts.

“The Government has limited Kiwibank’s ability to scale up and compete, leaving the big foreign banks free to make unnecessarily large profits off Kiwis, rather than pass on recent interest rate cuts to us all,” said Green Party Co-Leader James Shaw.

“New Zealanders could be getting better interest rates no matter who they bank with if Kiwibank was allowed to properly compete with the big four Australian banks.

“Under our plan, a first home buyer in Auckland with a $500,000 mortgage could save $690 per year, meaning they pay off their mortgage earlier.

“Across the entire economy, these mortgage savings alone translate into savings of $312 million per year. That’s a massive saving for NZ Inc.”

New Zealand’s banking sector is amongst the most profitable in the developed world.  Four foreign-owned banks control 87 percent of New Zealand’s banking industry — a situation ratings agency Standard & Poor’s recently described as ‘oligopolistic’.

“Our plan will help Kiwibank lead a change in New Zealand banking, by giving it a clear public purpose that requires it to drive competition to generate better interest rates for New Zealanders,” said Mr Shaw.

“We’ll help Kiwibank to grow faster by injecting $100 million of capital into the bank and let it retain more of its profits.

“Strengthening Kiwibank so it can create competition in the banking sector is the smartest way to ensure all banks pass on the best interest rates to Kiwis.”

Link to more information:
https://www.greens.org.nz/policy/smarter-economy/kiwibank

NZ Herald: ‘Beefed up’ Kiwibank would save homeowners big bucks – Greens

“Beefing up” Kiwibank would lead to lower interest rates and could save homeowners hundreds of dollars, Mr Shaw said.

“Under our plan, a first-home buyer in Auckland with a $500,000 mortgage could save $690 a year, meaning they pay off their mortgage earlier.”

Across the entire economy, these mortgage savings alone translate into savings of $312 million a year.

That’s a massive saving for NZ Inc.

But is it realistic? I’m sure the Green numbers will be checked over.

But Labour are sticking to strong arm tactics for now:

Labour leader Andrew Little said he would not rule out legislating to force banks to pass on cuts by the Reserve Bank…

It’s worth keeping in mind that with current support levels any changes to Kiwibank would also require NZ First support.

Last month Winston Peters slammed trading banks but gave no specifics on what he would want to do about them:

Winston Peters has got no sympathy for our trading banks.

The New Zealand First leader said the excuse used by the banks that they’re facing higher international borrowing rates doesn’t wash.

“The disparity between the actual borrowing rate and what they’re charging the borrowers in this country is a disgrace. We’re paying not the lowest interest rates in 50 years but in fact, in comparative terms, the highest”.

That doesn’t make sense. But NZ First voters, many of whom are retired and rely on interest earnings on savings, may not be happy with pushing interest rates down.

Kiwibank, not Aussiebank

How much risk is there of Kiwibank being sold off? How does Aussiebank sound?

Kiwibank started in 2002 due to a coalition agreement between Labour and the Alliance Party. It was a major policy success by Jim Anderton, and the bank has been a major success for Kiwis. Jim Anderton retires from parliament this year. His Alliance Party is winding up. Who will champion the Kiwi’s bank once Jim is gone?

Does National want to sell off Kiwibank?

Kiwibank tape catches English

An embarrassing recording of National Party deputy leader Bill English in private conversation has surfaced. He suggests National will sell Kiwibank “eventually, but not now”.

Mr English said last night he could not recall having a conversation with anyone about Kiwibank. But he said National had pledged not to sell Kiwibank in its first term of office and that policy was unchanged.

Their first term is just about over.

Government considering state asset sales – English

Finance Minister Bill English has signalled the Government is again considering partial state asset sales – including Kiwibank.

A good example was Kiwibank, English said. It had got to a size where it needed either a government guarantee or ”an awful lot of capital”.

”So one option would be to go to the market and raise capital. So keep crown ownership, majority crown ownership and raise the rest of the capital from the market. So who’d buy into that.”

Obviously there is support in National for selling Kiwibank . And we are just about at the end of their first term – so what will they do next term? There is increasing pressure on National from the right to be much bolder with policies like asset sales.

If the next government is an Act-National coalition there will be even more pressure on government to sell assets like Kiwibank.

What’s the best way to protect Kiwibank once Jim Anderton is not there to stand up for it?

UnitedFuture has always supported Kiwibank, and will continue to support Kiwibank. A significant UnitedFuture presence in parliament, and a continued presence of UnitedFuture in government, will provide a continued safeguard for Kiwibank.

Keep it Kiwibank

How much risk is there of Kiwibank being sold off? How does Aussiebank sound?
It’s known what Act and National would like to do.

UnitedFuture have supported Kiwibank, and will be releasing details soon about their stance.