About 95% of fraudulent online banking transactions involving mule accounts were "voluntarily" authorised by victims, making them harder for banks to detect and prevent, Deputy Finance Minister Lim Hui Yin said.
Responding to a supplementary question from Datuk Awang Hashim (PN-Pendang) in Dewan Rakyat on Monday (Feb 17), Lim explained that this type of “authorised fraud” complicates efforts to block suspicious transactions linked to mule accounts.
Lim also highlighted a new policy holding banks accountable for fraud victims, requiring them to compensate clients if they fail to comply with banking regulations.
Read more at https://tinyurl.com/2mmrxpne
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
Responding to a supplementary question from Datuk Awang Hashim (PN-Pendang) in Dewan Rakyat on Monday (Feb 17), Lim explained that this type of “authorised fraud” complicates efforts to block suspicious transactions linked to mule accounts.
Lim also highlighted a new policy holding banks accountable for fraud victims, requiring them to compensate clients if they fail to comply with banking regulations.
Read more at https://tinyurl.com/2mmrxpne
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
Category
🗞
NewsTranscript
00:00The Bank of Malaysia has imposed regulations and regulations on financial institutions
00:08to prevent them from being misused for financial crimes, including fraud and fraudulent accounts.
00:16These regulations, in line with the best global practice,
00:20include the Bank's obligation to carry out customer due diligence,
00:25or customer due diligence, CDD, face-to-face transactions,
00:30ongoing customer due diligence, OCDD, transaction monitoring,
00:36fraud detection, and cyber security.
00:41If there is any violation of these regulations,
00:46especially those resulting from fraud cases,
00:50supervisory measures and enforcement measures can be taken against the bank,
00:55including compensation, compound, admin penalty, and warrant letter.
01:00Efforts to monitor the level of compliance of financial institutions
01:05regarding these regulations are being carried out by the Bank of Malaysia
01:09as part of the process of assessing the financial sector in Malaysia.
01:15The power to issue regulations and take action is guaranteed
01:20under relevant laws such as the Charter on the Prevention of Illegal Monetary Transactions,
01:25the Prevention of Violent Investments and the Results of Illegal Activities 2001,
01:30the Charter on Financial Services 2013, and the Charter on Financial Services Islam 2013.
01:36In addition, the banking industry has also issued an industry certificate
01:41on the reporting and management of fraud accounts
01:45to ensure more effective fraud detection.
01:49This certificate ensures a more consistent approach
01:53to the industry in identifying,
01:56identifying and providing financial access to fraud holders.
02:03The process of analyzing fraud accounts as well as the CDD process
02:08has also been improved and supported by more comprehensive data.
02:12At the same time, police statistics in the Kingdom of Malaysia, PDRM,
02:16show that 95% of financial fraud cases in Malaysia
02:23occurred as a result of victims willingly making and processing payment transactions.
02:30In cases of authorized fraud,
02:33such as this one, the payment of damages with good intentions can lead to moral harm.
02:39Efforts by various parties are also important
02:42to ensure that people are always alert and aware of financial fraud.
02:48People are advised to refer to the list of user warnings,
02:54the Bank of Malaysia,
02:56the list of security insurance investors,
03:00and the SemakMew portal by the Police Department of the Kingdom of Malaysia
03:05before making any money transfers or investments.
03:09In addition, many people can also use the WhoScore application
03:14that is developed by the PDRM to prevent from accepting fraud calls.
03:20That's all. Thank you.
03:23Thank you, Mr. Speaker.
03:26Thank you, Mr. Prime Minister.
03:29The KEDAI account is a tool used to facilitate fraud scams.
03:38Without the KEDAI account, it is impossible for anyone to commit fraud.
03:47According to what was said by the Honorable Prime Minister,
03:52at that time, there were regulations set by the Bank of Malaysia
03:58regarding customer due diligence and transaction monitoring
04:03that the Bank of Malaysia required to monitor.
04:06My question is,
04:09why is it that the KEDAI account is still valid
04:17and bank scam fraud is still not detected?
04:21We can see that the KEDAI account is not prevented.
04:29After the bank scam fraud is detected,
04:35the action is taken.
04:37Even if the action is taken, the loss cannot be avoided.
04:45For your information,
04:48throughout 2024 alone,
04:51transactions worth RM399 million have been stopped by banking institutions.
04:59Fraud cases involving phishing and malware reported to the Bank of Malaysia
05:05also decreased by 60% in the first nine months of last year.
05:11This shows that the existing regulations and policies on financial institutions,
05:17including for fraud detection,
05:20are effective in reducing fraud cases
05:23and improving the safety of the bank.
05:27However, for fraud cases involving genuine or authorized fraud,
05:33the number of cases is still very high.
05:35That is, 95% of fraud cases are authorized.
05:43So, given the pattern of fraud with genuine
05:47that is a fraud transaction,
05:50financial institutions face severe challenges
05:53to identify and detect fraud transactions
05:57without posing a risk that can disrupt the smooth functioning of the payment system.
06:02In addition, fraud often exploits genuine customers,
06:06such as students,
06:08to open a bank account,
06:10which is more likely to be detected by a bank account.
06:13The pattern of using this account is similar to a genuine account,
06:17while the purpose of opening the account is also genuine.
06:21During the opening of the account,
06:23this customer has always met all the requirements for evaluating the genuine face of the customer or CDD.
06:30I can go on for a long time,
06:36but for your information,
06:40from the aspect of strengthening power,
06:42efforts to track and freeze funds have been strengthened
06:46through the implementation of the National Fraud Portal or NFP,
06:50through the efforts to automate the entire or end-to-end
06:54to manage fraud reports,
06:56as well as to identify and track stolen funds
06:59so that the appropriate action can be taken
07:01in financial institutions has been strengthened.
07:05Since the use of NFP in April 2024
07:09until September 2024,
07:12NFP has managed to freeze 34% of funds
07:16compared to the average of the month before the implementation of NFP.
07:20This is a situation that we must continue to look for a proactive step.
07:31For the two cases mentioned by Mr. Stampin,
07:36one of them has been solved,
07:40while the other is in the PDRM investigation.
07:44So, we will provide more detailed information
07:49to Mr. Stampin.
07:51That's all. Thank you.
07:52Thank you, Madam Speaker.
07:55My question is this.
07:58Please listen carefully to my answer.
08:02That's why I don't want the Ministry of Finance
08:07to be the center of camera.
08:09In December 2024,
08:11the Prime Minister announced that the Bank is required to pay compensation
08:15within five days
08:16to the victim if the theft occurs from the bank.
08:19The question is, how does the government ensure
08:22a win-win solution in the case of
08:24paying compensation due to bank theft
08:29so that users are more aware of their rights?
08:33At the same time,
08:34increasing the obligation of banking institutions to now
08:37improve the security system
08:39and implement verification protocols.
08:42What steps does the government take to implement
08:45a transparent compensation mechanism
08:47so that incidents do not occur where the parties are not responsible?
08:50Try to exploit it for personal gain.
08:54And we are also exposed to the risk of data leakage
08:58leading to scams.
09:00Finally,
09:02what are the government guarantees so that
09:04banks will not impose higher fees
09:07for services such as
09:09account management fees,
09:11transaction fees or other costs
09:14on the pretext of balancing the losses
09:17they bear from the payment of compensation
09:20and causing the customer to be burdened with additional costs?
09:24That's all. Thank you.
09:25Thank you, Minister.
09:26Thank you, Speaker.
09:28Thank you, Honourable Speaker.
09:31To strengthen the protection of users,
09:34the Bank of Malaysia has established the need
09:37for financial institutions to conduct
09:39an in-depth investigation
09:41on every financial fraud case.
09:44For cases involving financial crimes,
09:47the Bank of Malaysia has added
09:49an existing fund in 2024
09:52to ensure that the banks are fair to the victims of fraud.
09:56In this regard,
09:57the banks need to be responsible
09:59for the loss of fraud
10:01if it is caused by a bank's weakness.
10:04This fund also emphasizes
10:06the principle of mutual responsibility
10:08for clear cases
10:10involving the weaknesses of both banks
10:13and customers.
10:14This is a safe way to cover up
10:16the cases resulting from
10:18the failure of the banks
10:20to stop suspicious transactions.
10:23At the same time,
10:26the trust of both customers
10:30with the implementation of this fund,
10:32the burden of loss for such a case
10:34should not be fully borne by the victim.
10:38The victim has the right
10:39to get the usual compensation.
10:42At the same time,
10:43a non-customer investigation
10:46must be subject to a free or independent review
10:50with permission
10:51to ensure an objective bank assessment.
10:54This improvement is not only fairer
10:56to both parties,
10:58but also forms a more fair
11:00and reasonable balance.
11:02If the victim still does not agree
11:04with the decision or settlement
11:06offered by the bank,
11:08the victim has the right
11:10to face the decision
11:12in an alternative settlement,
11:15i.e. the financial market
11:18ombudsman.
11:20For your information,
11:21banking institutions
11:22cannot easily
11:24impose additional charges
11:26on users,
11:27especially for the mechanism
11:29to further improve
11:30the impact of the financial system
11:32in detecting and preventing fraud.