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Showing posts with label Banks. Show all posts
Showing posts with label Banks. Show all posts

Tuesday, October 15, 2024

Putting pressure on banks

 


Kill switch' not a cure-all | The Star

KUALA LUMPUR: The issue of whether banks should bear greater responsibility for clients losing money to online scammers is one for Parliament to decide, says Datuk Seri Azalina Othman Said.

The Minister in the Prime Minister’s Department (Law and Institutional Reform) said this may be necessary in light of the issue often raised by the public amid the nation’s move towards digitalisation.

“It is the MPs that should discuss if a more robust insurance scheme is needed for banks and financial institutions that hold our money.

“This is also because we now have a Digital Ministry as the nation heads towards digitalisation,” she said in reply to a supplementary question by Kota Melaka MP Khoo Poay Tiong in the Dewan Rakyat yesterday.

She added that the consumer himself should be careful and alert of scams.

Khoo asked if the banks should be made to bear responsibility for data breaches which result in their customers losing money to scammers.

He cited a recent complaint where a man claimed he had received a notification from a bank at 4.30am informing him of a change in the model of mobile phone used for his online transactions.

“The notification said that there would be a 12-hour cooling-off period before any transactions can proceed.

“However, in less than 12 hours, he found that his money had been transferred out of his account at about 8.30am,” said Khoo.

To this, Azalina said that she too almost fell victim to an online scam after receiving a notification at 3am.

“I was shocked that RM3,000 was transferred out of my account. Fortunately, I managed to get my money back,” she said.

Azalina advised the public to activate the “kill switch” linked to their bank accounts.

If you get a notification at 4.30am, hit the kill switch on your banking app as soon as possible,” she said.

'Kill switch' can prevent scam victims from suffering hefty ...


The kill switch is an initiative of Bank Negara which was adopted by banks on March 1 last year.

On the law against online crimes, Azalina said it could be tabled and passed during the current meeting.

She called on MPs to debate the issue when that proposed law against online crimes is tabled.

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Red flag in credit card fraud

Friday, October 11, 2024

Red flag in credit card fraud

 


With huge profits, it is time for banks and telcos to invest more in improving their infrastructure against rising criminal activities.

IT came as a huge shock to my colleague when she was saddled with a RM38,000 credit card bill – five transactions that took place in Brazil within minutes of each other, a country she had never visited in her life.

The purported expense came when she was travelling overseas. She only discovered her credit card was missing three months after the incident when the bank asked if she had her card with her.

“I was with another colleague in Hong Kong at the time. He received the same SMS alert from his bank. We both called our banks at the same time. But the difference was his bank stopped the transaction because they could not verify it,” she said.

Despite showing proof that she was in Hong Kong at the time of the transaction, her bank could not provide her with the details of the case as they did not ask the merchant for it. The minute they found out the transactions were physical, they washed off their hands and sent her a letter which indicated she was liable for the RM38,000.

“They even tried to charge a currency conversion fee, late fee and interest on the disputed transactions. Finally, after days of frustrating exchanges with the bank, I reported the case to Bank Negara, and only now the bank is reaching out to the merchant to investigate,” my colleague told me.

Sadly, her quandary is not something new. Credit card fraud is on the rise in Malaysia. But financial institutions in general argue that if a card is lost or stolen, it is still the responsibility of the cardholder if any transactions take place. But shouldn’t the onus be on the bank to at least perform due diligence on red flag transactions?

A year ago, banks under the ambit of the Association of Banks in Malaysia (ABM) and Associa-tion of Islamic Banking and Financial Institutions Malaysia (AIBIM) launched their refreshed #JanganKenaScam awareness campaign.

At that time, the associations claimed that the campaign underscored the banking industry’s commitment to combating financial scams and preventing fraudulent banking activities.

They have since implemented several security measures to fight scams, such as migrating from the SMS One-Time-Password (OTP), tightening their fraud detection rules, imposing a cooling-off period for first-time online banking registrations, restricting secure authentications to a single device, and setting up dedicated fraud hotlines for customers.

According to the two associations, these measures have successfully prevented fraudulent transactions worth RM351mil.

But combating fraudsters is a constant battle, with the banks themselves admitting that there is an upward trend and huge losses due to credit card fraud.

Over the years, The Star has published numerous articles highlighting scams and scammers and credit card fraud.

In fact, exactly 10 years ago, we published a front-page article on fraudulent credit and debit card transactions.

We wrote: “Many consumers are questioning the assurance banks give on Internet security after discovering that their credit and debit cards have been used in unauthorised online transactions.”

Ten years later, nothing seems to have changed. If anything, things have got worse.

A study by Ipsos last December revealed that an overwhelming majority of Malaysians have encountered scams, with a distressing number reporting substantial financial harm. The study indicated that scams are exploiting the digital realm, signalling a shift in criminal tactics that jeopardises our collective economic health.

Despite the additional security measures, the current national scam awareness campaign throws the entire burden of fighting scams on poor defenceless Malaysians, many of whom are retired, in their senior age, and somewhat gullible.

This is in stark contrast to what our neighbour down south has done – Singapore is holding the telcos and banks responsible for customers who have fallen prey to scams.

The Monetary Authority of Singapore (MAS) says financial institutions and telcos will have to compensate their customers who have been cheated if they are found to have breached their responsibilities.

These responsibilities include failure by banks to send outgoing transaction alerts to consumers and telcos failing to implement a scam filter for SMSes.

The Singapore authorities acknowledged that “responsibility for preventing scams should not lie solely with consumers but also with industry stakeholders”, such as the financial institutions and telcos.

The shared responsibility should also apply here because banks and telcos, as the primary gatekeepers, must do more to protect Malaysians.

Financial institutions play a critical role as a gatekeeper against the outflow of monies due to scams, while telcos play a supporting role as infrastructure providers for SMSes.

They must incorporate more circuit breakers and track the enormity of the scams that are taking place. Tracking is not good enough; they must also act on it.

With Budget 2025 to be tabled next week, I hope our reform-minded Finance Minister introduces stronger and better measures to help Malaysians and demand more from banks and telcos.

Banks and telcos have amazing balance sheets with huge profits. It is time that they invest more to improve the infrastructure against scamming and fraud.

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Financial literacy and bankruptcy

Saturday, April 20, 2024

A wake-up call for banks

 KUALA LUMPUR: The police remain firm in their stance that people should ignore calls from unknown numbers.

Instead, they say, legitimate businesses have to find new ways to handle over-the-phone marketing and verification methods.

The need for new ways is due to scammers also using the same methods to make victims part with information about themselves, according to Federal Commercial Crime Investigation Department director Comm Datuk Seri Ramli Mohamed Yoosuf.

Comm Ramli acknowledged that both the banking and telemarketing industries have been facing problems with customers refusing to reveal information about themselves for verification purposes.

“I have been asked what would happen to industries that rely on telemarketing services to promote their services if the police continue to advise all to not answer calls from unknown numbers. I urge these industries to change their promotion tactics and not try to change consumer behaviour.“Among the more popular tactics in online scams are the use of phone calls to contact victims directly. This has created a fear among people that unknown calls are from scammers.“Our priority must be the protection of consumers,” he said.

In the eyes of the police, he said, the best way to avoid being scammed is to simply ignore unknown calls, as this completely removes the risk of being cheated over the phone.

He added that he had also personally received legitimate calls but would not give the required information as he preferred to err on the side of safety.

“Just last week, I received five calls from two banking institutions for over-the-phone verification. When I asked about the purpose of the call, I was told I would need to verify my identity first.

“So it’s a never-ending issue; I have to verify myself to them and the banks will need to verify themselves to me.

“In the end, no one verifies and both end the call,” he said, leading to laughter from reporters.

He also noted that business is still being conducted using mobile numbers, leading to even more suspicion.

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Monday, October 2, 2023

Putting off charge for DuitNow QR payments, call for waiver for DuitNow QR payments permanent

 

New rules: PayNet said debit and credit card payments were subjected to MDR, while there is currently a MDR waiver for QR payments. — SHAARI CHEMAT/The Star© Provided by The Star Online

PETALING JAYA: Several financial institutions, including Public Bank and CIMB, have announced a waiver of the merchant discount rate (MDR) for vendors accepting payments via the DuitNow QR code platform.

CIMB has decided to postpone the MDR until the end of the year, while Public Bank will maintain the waiver until further notice. 

Public Bank has communicated on its website that it would waive the following fees for QR payment acceptance, effective from Oct 1 until further notice.

It said merchants would enjoy fee waivers for categories such as payment acceptance via Current and Savings Accounts, ewallets, and Maintenance Fee and API Integration Fee under the bank’s Enterprise Plan.

Credit card transactions under the Enterprise Plan will incur a charge of 0.25%.

The DuitNow QR service enables money transfers between banks and non-bank entities by scanning QR codes.

Related video: DuitNow QR charges won’t burden low income groups, says PM 


It was established by Payments Network Malaysia Sdn Bhd (PayNet) under Bank Negara’s Interoperable Credit Transfer Framework.

Earlier yesterday, Paynet confirmed that vendors would be charged a transaction fee for payments received via the DuitNow QR code platform starting Nov 1.

It said there were charges for two different epayment types – the MDR and the 50sen fee for transactions exceeding RM5,000 for peer-to-peer fund transfers between personal QR codes, not payments to merchants.

ALSO READ: Charge on DuitNow QR payments will burden SME sector, says group

Merchants, it said, would receive the payment made by their customers after deducting the MDR, which is charged based on a percentage of the transaction value.

PayNet said debit and credit card payments were subjected to MDR, while there is currently a MDR waiver for QR payments.

Starting Nov 1, the MDR waiver for DuitNow QR payments would be lifted, it said in a statement, adding that the MDR was neither a new fee nor an additional charge.

“As an incentive to promote usage during the introduction of QR payments in 2019, the MDR was waived. This was extended due to the Covid-19 pandemic.”


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Wednesday, June 28, 2023

Banks to delay fund transfers in latest move to fight fraud

PUTTING THE HEAT ON SCAMMERS

 PETALING JAYA: In its latest move to fight scammers, the banking industry has introduced several safety measures including delaying the movement of “abnormal” funds by 12 hours.

Public Bank introduced the half-day cooling-off transfer period, which would allow people who have been scammed to stop their funds from being moved out. The new policy came into effect from yesterday.

In a statement to customers, it said it was introducing the transaction cooling-off period for abnormal transfers.

A cooling-off period is a precautionary measure that allows banks to review and assess transactions that display “characteristics of abnormal behaviour.”

This additional step was proposed by Bank Negara Malaysia and is designed to minimise the risk of unauthorised transactions and potential fraudulent activities, ensuring the safety of customers’ funds.

“As an added security feature to protect your financial interests, the bank will be introducing a transaction cooling-off period for abnormal transfers with effect from June 22, 2023,” Public Bank said in its statement.

It explained that when the bank detects a transaction deemed to be abnormal, the transaction will be put on hold.

“The bank will notify you of the status of your transaction via SMS, email and push notification.

“Alternatively, you may track your transactions by logging into PBe, clicking ‘Account’ and selecting ‘View Pending Verification’. Any transaction that is undergoing the transaction cooling-off period will be listed here.”

On June 11, in an email reply to The Star, Bank Negara said it would be up to banks to implement cooling-off periods of between 12 and 48 hours.

Meanwhile, Bank Islam Malaysia Bhd has also executed a cooling-off period – a 12-hour waiting interval for any new application or request made on its IB, GO and GO Biz banking apps this week.

It also introduced a new “kill switch” feature allowing customers to protect their funds from online scams and temporarily deactivate access to several Bank Islam Internet banking services.

Last year, Bank Negara announced several measures for banks to implement, including migrating from SMS OTP to more secure forms of authentication, implementing a cooling-off period for first-time enrolment of online banking services and limiting the number of registered devices for authenticating transactions.

It also wanted banks to establish dedicated scam hotlines for victims and to have a “kill switch” for victims to freeze their accounts temporarily to stop the loss of funds.

“In addition, public awareness remains important in preventing online banking fraud,” said Bank Negara.

On May 2, in The Star’s front-page report titled “Fighting chance to beat scammers”, cybersecurity law expert and lawyer Derek John Fernandez mooted the idea of adopting a 48-hour “cooling period” when funds above a certain threshold are transferred to new bank accounts.

This, he said, would give scam victims time to pull their money back from the brink.

Fernandez said that was one way to stop financial scams as victims usually realise they have been scammed after 24 hours.

He had proposed the 48-hour cooling-off period to the government, including Bank Negara and the Malaysia Communication and Multimedia Commission (MCMC).

“During the cooling-off period, if the new bank account seems suspicious or if the bank receives complaints, the accounts can be tracked down by MCMC and action taken.

“If consumers suspect they have been scammed, they can cancel immediately. MCMC can then publish these account numbers to its website to alert others,” Fernandez said in his proposal.

On May 12, MCMC chairman Tan Sri Mohamad Salim Fateh Din said that RM1.2bil was lost to scammers between 2021 and April 2023. 

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Dangerous deepfakes 

 

CLICK TO ENLARGECLICK TO ENLARGE

 PPETALING JAYA: Deepfake technology, which uses artificial intelligence to manipulate videos, has become a tool for scammers.

The celebrity promoting a product may not really be that person. Instead, it could be scammers posing as the celebrity.

Celebrity impostor scams are fake posts using photographs and artificial intelligence (AI) videos of famous people on social media accounts to lure people into making financial investments or buy products.

ALSO READ : Enough warnings given

These days, Facebook, Twitter and Instagram are filled with such fake celebrity accounts set up to deceive devoted fans.

Scammers con the real star’s followers into making donations to charity, buying exclusive tickets or entering into investment deals which will definitely be profitable or a fee to win big prizes.

Cyberlaw expert Derek Fernandez said the scammers now were very clever, pointing out a recent case in China where the latest technology – the new AI face-changing app – was used to defraud the head of a company of 4.3 million yuan (RM2.8mil) in just 10 minutes.

Local scammers are not far behind, he said, as local celebrities and famous people like politicians seem to be popping up on social media accounts urging one to invest or buy currencies.

“Celebrity impostor scammers can be charged under Section 233 of the Communications and Multimedia Act 1988 (Act 588),” said Fernandez.

The Malaysian Communications and Multimedia Commission (MCMC) could even haul up internet service providers (ISPs) and their directors for misuse of their network by scammers.

The MCMC, in a statement, said it was urging all over-the-top (OTT) platforms, like YouTube and Netflix, to cooperate in this regard.

“MCMC will be reminding internet service providers (ISPs) regarding their legal obligations under Section 263 of the Communications and Multimedia Act 1998 (Act 588).

“ISPs are required to use their best endeavour to prevent their network facilities from being used for any illegal activities in Malaysia.

“This includes improving their detection, identification and elimination of scam sites and contents, and cooperating with MCMC in combating such illegal activities.

“MCMC takes a firm stance against any form of scamming and fraud,” it said.

Fernandez said that Section 233 criminalises online content that is obscene, indecent, false, menacing or offensive in character with intent to annoy, abuse, threaten or harass another person.

If convicted, an offender could be fined not more than RM50,000 or imprisonment for up to one year or both.

He also said that, depending on the case details, celebrity impostor scammers can be charged under the Penal Code. 

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Saturday, July 9, 2022

Financial literacy and bankruptcy

 

Stretching your ringgit: The importance of knowledge in this space cannot be more timely, especially when Malaysians are doing their level best to stretch their ringgit in order to cope with the increasing cost of living from inflationary pressures, which are spiralling out of control.

It is not enough to be good at your job. Managing your money well is as important as having good hygiene.

Lack of financial discipline reasons for bankruptcy

Using a credit card or apps wisely to accumulate points for future spending, waiting for bargains such as free shipping options or vouchers on ecommerce platforms on special days of the months to purchase necessities are just a few examples of being financially aware. 

FINANCIAL literacy is an important agenda for a country’s economic well-being.

Most governments around the world would like for their citizens to be financially literate, be it entrepreneurs, working professionals, white collar or blue collar workers.

It is not enough to be good at your job. Managing your money well is as important as having good hygiene.

Recently, the Malaysia Department of Insolvency (MDI) reported that 287,411 people in the country have been declared bankrupt as of March 2022.

Between 2018 and May 2022, there was an increase of 46,132 new bankruptcy cases.

Of this number, 59% (amounting to 27,365) of the bankrupt were aged below 44.

This led to the Prime Minister highlighting his concern on youth bankruptcy and requesting for the relevant authorities to look into this matter including potentially revamping the laws on insolvency.

It is important to note that due to the pandemic, our government has in fact raised the threshold of bankruptcy from RM50,000 to RM100,000 in 2020.

Many legal actions against defaulters of loans were also postponed due to the effects of the pandemic.

Personal loan main reason for default

Diving into the MDI’S statistics, I realised that the main reason for bankruptcy was due to default of personal loans with an overwhelming percentage at 42%, followed by hire-purchase loans (15%) and business loans (13.5%).

Personal loans have often been touted to charge exorbitant interest rates, especially credit card schemes.

A simple illustration: when month end comes, there are often three options to settle your credit card bill, namely statement balance, outstanding sum or minimum sum.

The right thing to do would be to settle the statement balance. Settling the outstanding sum in full means that the credit card user is paying down the credit card debts which isn’t yet due, which defy the purpose of utilising credit card in the first place.

Paying only the minimum sum, which many people often do, would lead to one incurring high interest on the outstanding credit card debt.

This would snowball to levels which are highly exorbitant.

The statistics above is telling because it shows that excess consumption pattern is a key reason for bankruptcy.

In terms of youth bankruptcy, it makes sense especially with social media propagating binge spending, splurging on luxury goods and the shallow mindset of keeping up with the Joneses.

Living beyond one’s means owing to social pressure simply isn’t going to go out of fashion, more so in today’s digital age.

Proliferation of get-rich-quick schemes and scams

There is no doubt the lack of financial discipline and bad spending habits are reasons which contribute to this social issue.

However, I believe another major contributing factor is the increasing number of scams and get-rich-quick schemes. These schemes often tap on the most vulnerable segment of the society, namely those who are greedy, desperate or naive.

Greed is one of human nature’s biggest weaknesses. Despite the evolution of mankind, this primal instinct has continued to flow through the DNA of mankind. I do not doubt the importance of greed as a driver for progress, but too much and it becomes fatal.

Desperation, especially in the case of hardcore poverty or extreme emergency without anyone to rely on, there is hardly any choice to seek help.

We have seen this episode played out, especially in the times of economic recession, high unemployment not unlike the period of pandemic we have all been through recently.

Of the three, the most addressable would be the one who is naive, in short, one who lacks the necessary knowledge.

Stretching your ringgit

The importance of knowledge in this space cannot be more timely, especially when Malaysians are doing their level best to stretch their ringgit in order to cope with the increasing cost of living from inflationary pressures, which are spiralling out of control.

I would like to put it on record: Accumulating financial knowledge does not mean becoming an investment prodigy. It can be as simple as understanding the various options for people to stretch their money.

One of the most common savings hacks would be to channel your monthly salary to a “flexi” or “semi-flexi” home loan account. This simple gesture every month automatically lowers the interest on the loan to be incurred.

Your unused funds will be utilised to further reduce the principal and interest while you have the option to withdraw the excess amount if you require to use the funds.

Using a credit card or apps wisely to accumulate points for future spending, waiting for bargains such as free shipping options or vouchers on ecommerce platforms on special days of the months to purchase necessities are just a few examples of being financially aware.

Of course, the best thing to do is to be prudent in spending, in essence practicing delayed gratification at all times.

The best investment is knowledge

It is a good sign that there is an increasing number of licensed financial professionals such as Chartered Financial Analysts and Certified Financial Planners out there today.

We also do see many more collaborative efforts between industry professionals working hand in hand with regulators in adopting social media to reach out to the masses.

With the advent of social media, it is also crucial to sift out genuine financial literacy advocates. After all, there are many free resources online today.

It is not to say the smartest people from the top of their professions cannot be hoodwinked. We have seen how 34-year-old Ng Yu Zhi of Envy Asset Management and Envy Global Trading swindled prominent people like the general counsel for Temasek Holdings Pek Siok Lan, criminal lawyer Sunil Sudheesan, ex-president of the Law Society Thio Shen Yi, chairman of Vickers Capital Group Finian Tan and CEO of Chuan Hup Holdings Terence Peh, among others.

This purported nickel trading scheme amounting to S$1bil (Rm3.2bil) was the largest fraud or Ponzi scheme in Singapore’s history. The best part, red flags were obvious where both of the perpetrator’s entities above were not licensed by Monetary Authority Singapore and he was promising 15% returns in three months to his clients.

Ultimately, it comes down to the individual and a good sense of financial awareness when managing one’s own hard-earned money.

The best investment is in yourself. Whether it is learning a new skill or advancing your education, self enrichment gives the best return on investment.

As Benjamin Franklin once said, “An investment in knowledge pays the best interest”. He can’t be wrong considering his face is literally on the US dollar bill even till today. - StarBiz,

Ng Zhu Hann, the CEO of Tradeview Capital. He is also a lawyer and the author of “Once Upon A Time In Bursa”. The views expressed here are the writer’s own.

 

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Financial literacy and technology are key factors, will attract young investors

 

Promoting women entrepreneurs; mind your finances 

 

Be wary of these four types of financial predators

 

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