KUALA LUMPUR – Bank Negara Malaysia (BNM) has issued enhanced fraud protection policies following recent reports of HSBC being sued in Australia over a spoofing scam which resulted in customers losing around RM64 million.
The suit, filed by the Australian Securities and Investments Commission (Asic), alleges that HSBC failed to protect 950 customers from fraudulent transactions over several years. Asic claims that HSBC’s monitoring and security measures were insufficient to detect and prevent these scams.
Responding to Scoop on strengthening consumer protection in Malaysia, BNM said that it has recently issued policy enhancements to ensure financial institutions (FIs) treat financial fraud victims fairly as part of efforts to strengthen the protection of consumer rights.
The central bank, in a statement to Scoop, said that the policy focuses on ensuring FIs undertake robust and timely investigations for every case and sets a clear obligation for FIs to bear all fraud losses if an unauthorised transaction is solely caused by lapses in the security controls adopted by the institutions.
“The enhanced policy also emphasises the principle of joint responsibility. This is particularly important for cases arising from negligence of the customer, for example, the customer clicks a dubious link or downloads a file from an untrusted source; or lapses in the FI’s security controls to prevent further fraud losses, for example, failure to block a series of unauthorised transactions which is not consistent with the typical transaction behaviour of the customer within a short time).
“With this policy, victims in cases with an element of joint culpability shall not fully bear losses and, thus, are entitled to appropriate compensation. Further, any cases not in the customer’s favour must also be subject to an independent review to ensure such cases have been objectively assessed.”
It also added that if the customer does not agree with the decision or compensation offered by the FI, they have the right to lodge a dispute related to the decision with the Financial Services Ombudsman (OFS), an independent and free channel for financial dispute resolution.
Highlighting its ongoing efforts to monitor FIs’ practices in resolving fraud complaints, BNM said that it is constantly monitoring the practices of FIs in resolving complaints of financial fraud to ensure victims receive appropriate treatment.
The bank suggested victims submit complaints to the relevant FI’s Complaints Unit for feedback.
“If there is no response from the relevant Complaints Unit after 14 working days, the case can be referred to BNMLINK via bnm.gov.my/LINK.”
To further combat fraud, BNM has also engaged the public through awareness initiatives.
“The industry, through the Association of Banks in Malaysia, has launched the #JanganKenaScam awareness campaign through a series of roadshows and social media,” the central bank added. – December 20, 2024
