KUALA LUMPUR – Banks are to bear responsibility for fraud victims’ losses and compensate them, including in cases where customer’s own negligence or carelessness may be involved, deputy finance minister Lim Hui Ying said in the Dewan Rakyat today.
Banks are to investigate fraud complaints and decide on appropriate compensation, she said during Question Time.
Lim said under existing rules, banks cannot make customers responsible for losses in banking scams without strong evidence to show that the account holder failed to take steps to protect their personal details at all times.
“Each fraud case will be investigated, and in cases which are caused by the bank’s own system weaknesses or risk reduction practises the bank is responsible for bearing the loss.
“Even so, if there is proof showing the account holder compromised their own details due to their own carelessness, the bank must weigh the appropriate compensation to be given to the victim after investigating the case,” Lim said.
Account holders who disagree with the amount of compensation offered by the bank have the right to dispute it and bring their dispute to the Ombudsman for Financial Service (OFS), she added.
OFS is an alternative dispute resolution channel to resolve complaints between the financial service provider and their customer.
Lim was replying to Chong Chieng Jen (Stampin-PH) who asked if the government had plans to amend the law to make banks bear the losses of account holders who have been scammed, whether fully or in part. He said this was in view of scam cases which are becoming more rampant.
She said Bank Negara Malaysia (BNM) has taken various preventive and security measures, which must be considered when banks decide on compensation amounts.
With this improvement, any compensation must first take into account the effectiveness of security controls implemented by financial institutions in dealing with financial fraud,” she said.
Other security policies introduced include limiting customers to only use one device for online banking transactions authentications.
“BNM has also implemented a ‘kill switch’ mechanism that allows users to freeze their own accounts if there is any suspicious activity, including if they find that their accounts may be accessed or used without permission,” she said
On fraud statistics, Lim said from 2020 until the middle of last year, there were 18,238 financial fraud cases reported, of which 11% were brought to the OFS for further investigation.
“And out of this 11%, which is around 2,000 cases, 75% has been resolved. – July 9, 2024