The burden to conduct a detailed probe to prove any unauthorised banking transaction lies with the banks and not the victim of financial scams, says Lim Hui Ying.
Deputy Finance Minister said this in response to a question from Chong Chieng Jen (Pakatan Harapan-Stampin) during Question Time in the Dewan Rakyat on Tuesday (July 9).
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Deputy Finance Minister said this in response to a question from Chong Chieng Jen (Pakatan Harapan-Stampin) during Question Time in the Dewan Rakyat on Tuesday (July 9).
Read more at https://shorturl.at/FRlcC
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NewsTranscript
00:00Thank you, Mr. Speaker and Honourable Members of the House of Commons.
00:06At this time, the existing regulations and laws have taken into account the need to protect
00:13the public from financial fraud.
00:16However, I understand the public's concerns.
00:19I would like to make it clear that according to the existing regulations, banks cannot
00:25be held liable for any loss resulting from a bank fraud.
00:32Unless the bank has solid evidence to show that the client did not take the appropriate
00:39steps to protect the personal safety of the individual at all times.
00:45In general, every fraud case will be investigated and given a case caused by a system failure
00:52or a bank's own risk management practices, the bank will be held liable for the loss.
01:00However, if solid evidence shows that the safety of the individual has been compromised
01:07due to the failure of the bank's owner, the bank must consider offering a fair compensation
01:14to the victim based on the details of the case.
01:19If the bank does not agree with the decision or offer of compensation, the account holder
01:28has the right to make a statement regarding the decision to the Ombudsman for Financial
01:38Services.
01:41To strengthen the protection of the rights of the user, the Bank of Malaysia has also
01:47increased the basis for controlling electronic banking transactions without these new rights.
01:55This includes ensuring financial institutions carry out more comprehensive and transparent
02:02investigation in a timely manner, as well as implementing more effective prevention controls.
02:08With this improvement, a fraud must first take into account the impact of the safety
02:16imposed by financial institutions in handling financial fraud.
02:21This basis also clarifies the responsibility of users and banks to handle financial fraud
02:28in a timely manner.
02:30In an effort to finalize this basis, the Bank of Malaysia has carried out an investigation
02:37with the relevant parties.
02:39Other than that, since June 2023, all major banks have also implemented the following
02:45steps.
02:46First, ensuring that every bank transaction complies with safety standards, such as checking
02:53customer transactions and notifying customers of transactions.
02:57Second, enforcing fraud checking regulations to make sure transactions are suspicious.
03:05Third, restricting customers to only one stop for checking bank transactions in a chain
03:12to prevent the use of accounts by third parties.
03:16And speeding up the transfer of one-time OTPs through SMS messaging systems to more
03:26secure checks for transactions in a chain related to opening accounts, transferring funds,
03:33payment, and personal information exchange and setting up accounts.
03:39Providing a special hotline chain for victims to report fraud cases in the chain.
03:44In addition, the Bank of Malaysia has strengthened the Kill Switch mechanism, which allows users
03:52to freeze their own accounts if there is suspicious activity, including if they find that their
04:01accounts may be accessed or used without permission.
06:31Thank you.
07:02The number of cases received in 2020-2023 is 18,238 cases.
07:14Of these 11 cases, around 2,000 cases have been brought to the OFS.
07:23Of the 2,000 cases, 75% have been resolved.
07:36I would also like to emphasize here that the burden of carrying out unscrupulous investigation
07:45to prove the wrongdoing of bank transactions without justice is placed on the part of the
07:52bank and not on the victims.
07:54Victims do not need to prove that the transaction is not true, but it is the bank to prove it.
08:03Any compensation provided by the bank will take into account the unscrupulous investigation
08:08carried out for each case and the impact of the security control carried out by the bank
08:14in handling financial fraud.
08:19If the loss of financial fraud is a result of the bank's negligence or weakness, then
08:26the bank must be fully responsible for the loss.
08:32If the victim does not agree with the bank's decision or offer of compensation,
08:38the owner of the account has the right to issue a decision-related statement to the OFS.
08:44So, I know that YB Stampin needs a number of data.
08:51At this time, I do not have it.
08:53I will answer in writing.
08:55Thank you.