Only banks able to conduct investigations on unauthorised banking, says Deputy Finance Minister

KUALA LUMPUR: The burden to conduct a detailed probe to prove any unauthorised banking transaction lies with the banks and not the victim of financial scams, says Lim Hui Ying.

“Scam victims do not need to prove that the transaction is real, but it is for the bank to prove,” said the Deputy Finance Minister in response to a question from Chong Chieng Jen (Pakatan Harapan-Stampin) during Question and Answer Time in the Dewan Rakyat on Tuesday (July 9).

Chong had asked the Finance Ministry to state whether it has any intention to amend existing laws so that banks are held responsible for covering (partially or fully) the losses of victims due to frequent financial loss scams.

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She added that any compensation provided by the banks will take into account the detailed investigations conducted for each case and the effectiveness of the security controls implemented by the banks to address financial fraud.

“If the financial loss is solely due to the negligence and weaknesses of the bank, then the bank must be fully responsible for the loss,” she said.

She also noted that if the scam victim disagrees with the bank’s decision and compensation offer, the account holder has the right to dispute the decision with the Ombudsman for Financial Services (OFS).

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Aside from that, Lim said the main banks have implemented several measures since June 2023, including ensuring that every banking transaction complies with security features such as confirming customer transactions, providing transaction notifications to customers and strengthening fraud detection rules to identify suspicious transactions.

Aside from that, banks have also limited customers to only one device for authentication of online banking transactions to prevent misuse of accounts by third parties.