Hong Kong Monetary Authority Intensifies Fraud Detection Measures Amid Surge in Check Fraud Cases

The Hong Kong Monetary Authority (HKMA) is taking steps to combat the rising tide of check fraud in Hong Kong, particularly with the adoption of the Faster Payment System (FPS).

In mid-October 2023, the HKMA urged banks to expand interbank information-sharing platforms to cover personal accounts. This measure is aimed at improving the detection of suspicious transactions and enhancing overall fraud prevention.

Real-time Fraud Alerts

The HKMA also recommended the introduction of real-time fraud alerts for customers using the local FPS. These alerts can help customers identify and address potential fraudulent activities as soon as they occur.

Improved Customer Alerts

Additionally, improved fraud alerts for customers using the FPS were suggested by the HKMA. These alerts not only inform customers of suspicious transactions but also provide guidelines on how to proceed should they suspect fraud.

New Initiatives by the HKMA

The HKMA launched several new initiatives to enhance fraud detection efforts, including the FPS suspicious proxy ID alert and the Anti-Deception Alliance in November 2023.

Rising Fraud Complaints in Hong Kong

HKMA data revealed a near-doubling of banking fraud complaints in the first nine months of 2023, with 954 complaints recorded compared to 555 in all of 2022. Types of fraud and scams reported included social engineering, money mules, phishing, malware, and unauthorized online new account openings.

The Need for Public Education and Real-time Fraud Monitoring Systems

Thanh Tai Vo, Director of Fraud and Identity at Apac, LexisNexis Risk Solutions, emphasized the importance of public education and real-time fraud monitoring systems in the light of increasing fraud and scams. Vo also highlighted the role of information sharing and confirmed fraud data among banks in reducing fraudulent activities.

Earlier in the summer of 2023, the HKMA, the Hong Kong Association of Banks, and the Hong Kong Police Force collaborated to launch the Financial Intelligence Evaluation Sharing Tool, a bank-to-bank information sharing platform, which is being rolled out in phases.

Assistance from Tools and Technology

Tools like LexisNexis ThreatMetrix can help in tracking scammers worldwide and significantly aid in fraud prevention. The platform processes over 100 billion transactions annually and is designed to help in addressing the issue of increasing fraudulence.