Hong Kong’s banking regulator has launched a consultation with lenders to establish a framework that sets out who should bear the cost when customers are tricked into authorising payments to scammers.
According to South China Morning Post, the Hong Kong Monetary Authority (HKMA) issued a revised proposal to retail banks on Friday, aiming to clarify the division of responsibility between banks and customers. The move comes as scam-related crimes continue to surge in the city.
Arthur Yuen Kwok-hang, the HKMA’s deputy chief executive, told attendees at the Hong Kong Institute of Bankers annual conference that the new framework seeks to strike a balance. “It would be unrealistic and really unfair to expect banks to be able to prevent every scam transaction right away,” he said. “But at the same time, we should emphasise that banks should have effective measures in place to support customers in doing that.”
Unlike cases where criminals seize control of bank accounts and execute unauthorised transfers, the framework focuses on situations where customers are deceived into approving payments. Yuen explained that factors such as the age of a victim may complicate claims and should be taken into consideration when assessing responsibility. “We are not saying that in every case the bank must pay or the customer must pay,” Yuen said. “In the next few months we will, in the consultation period, work very closely with the industry to finalise the package.”
Yuen also stressed that banks could face liability if they failed to act when their fraud monitoring systems flagged suspicious activity. “The bank clearly fell short in supporting fraud prevention and should bear some responsibility,” he wrote in a blog post. However, he added that customers who proceed with a payment after being alerted by their bank would have to accept responsibility for losses.
Fraud cases in Hong Kong have reached record levels. According to police data cited by Yuen, 44,480 fraud-related cases were reported last year. In the first half of this year alone, 20,764 cases were recorded, making up 48% of all reported crimes and reflecting a 4.3% rise year-on-year. These cases involved losses of HK$3.54bn (US$455m). “It’s a lot of money,” Yuen said.
A separate survey by City University of Hong Kong found that 6.8% of Hong Kong respondents had experienced scam losses, the highest among respondents from Hong Kong, Taiwan and mainland China. Over half of Hong Kong victims reported losing more than HK$100,000. The study also revealed that victims often held bachelor’s degrees or higher, underlining that fraud can affect highly educated individuals as well.
Christine Huang Yi-hui, a professor at City University, said, “Fraud is not simply a matter of poor individual judgment. Rather, it represents a long-term battle involving information and trust.”
Authorities in Hong Kong have introduced several measures to combat the growing problem. In April, the HKMA confirmed that banks would gain greater powers to trace and freeze suspicious accounts by collaborating more closely with the police. In June, Hong Kong police joined forces with authorities in Macau and Thailand to tackle cross-border scam networks.
The HKMA has not provided a timeline for when the consultation will be completed or when the new responsibility framework will take effect.
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