Title: HKMA Tackles Credit Card Fraud: New Measures to Bolster Online Security in Hong Kong’s Banking Industry
HKMA Responds to Surge in Credit Card Fraud Complaints
The Hong Kong Monetary Authority (HKMA) has taken action to address a rise in consumer complaints about online credit card fraud. Following industry consultations, local banks have been instructed to boost security measures and safeguard clients against digital scams and cheats.
Seven New Initiatives to Strengthen Credit Card Transaction Safety
During a media briefing, HKMA Deputy CEO Arthur Yuen Kwok-hang outlined seven new initiatives aimed at enhancing credit card transaction security in Hong Kong’s banking industry. These measures will be implemented progressively.
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Compulsory Mobile Phone Consent for Digital Payments Starting in June, all banks will require clients’ consent to link their mobile phone numbers with digital payment applications like ApplePay and GooglePay, addressing concerns about unauthorized account activities.
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Enhanced Approval Process for Spending Limits Banks must now secure customer consent before implementing any changes to their credit card spending limits. Additionally, clients must confirm transactions that exceed these limits.
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Instant Mobile Card Suspension Feature Clients will be able to instantly suspend or block their lost or stolen credit cards through mobile phone apps, minimizing potential losses from fraudulent charges.
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Phasing Out Swipe-card System authorities and banks will collaborate to encourage merchants and businesses to adopt mobile electronic terminals, ultimately phasing out the traditional swipe-card system at checkout counters.
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Establishment of Dedicated Teams for Disputed Transactions Financial institutions will be encouraged to set up dedicated teams to handle disputed credit card transactions more efficiently and effectively.
Rise in Unauthorized Credit Card Transactions
This year, the HKMA has received a total of 382 complaints about unauthorized credit card transactions, compared to 391 in 2022. A significant increase from the 51 cases reported in 2019. This spike can be linked to the pandemic, as consumers have increasingly shopped online instead of in physical stores.
Investigation into Standard Chartered Suspected Fraud Cases
In December 2022, the HKMA launched an investigation into suspected fraud cases at Standard Chartered after clients reported unauthorized transactions in foreign currencies.
Summary
In response to growing concerns regarding credit card fraud, the HKMA has released a series of new initiatives designed to strengthen credit card transaction safety in Hong Kong’s banking industry. These measures include mandatory mobile phone consent for digital payments, enhanced spending limit approval processes, the ability to instantly suspend lost or stolen cards, and the phasing out of the traditional swipe-card system. Furthermore, financial institutions will be encouraged to establish dedicated teams to handle disputed credit card transactions more efficiently.