The Hong Kong Monetary Authority (HKMA) is warning consumers to be wary of suspicious small transactions, following rise in fraud.
Over the past three weeks, the regulator has received eight reports from three local banks surrounding unauthorised small-value payment transactions. These transactions have a combined value of HDK 70,000 ($8,918).
The regulator believes the fraudsters have stolen customers’ online banking login passwords and are making these small-valued payments.
As part of regulatory requirements, banks should instantly notify customers when a transaction is completed. Due to this stipulation, customers were able to realise unauthorised activity on their account and alerted the bank in question.
Law also states that customers are not held responsible for any direct loss suffered through unauthorised payments, unless they act fraudulently or with ‘gross negligence’.
The affected customers have all been compensated and the police are now looking into the incidents.
As result of this, the HKMA has reminded consumers to ensure sufficient protection over their online banking services. Some of the tips provided by the regulator include regularly changing passwords, installing security software on computers and mobiles, refraining from using public computers or Wi-Fi for online banking, and checking their accounts frequently.
If a consumer does notice unauthorised activity, they can contact the Anti-Deception Coordination Centre of the police.
Earlier in the year, the HKMA fined JPMorgan Chase Bank $1.5m for failures with their AML and CTF processes. The bank had been found of breaches in customer due diligence by not undergoing necessary checks for certain customers.
Copyright © 2018 RegTech Analyst
