Hong Kong’s Banks Crack Down on Credit Card Fraud

Efforts to Prevent Unauthorized Transactions and Protect Cardholders

In an effort to combat the rising number of unauthorized payment card transactions involving frauds and scams in Hong Kong, the Hong Kong Monetary Authority (HKMA) has issued a circular reminding banks of their obligations to treat customers fairly and adopt a pragmatic approach when handling disputes related to unauthorised transactions.

New Guidelines for Banks

• Consideration of Circumstances: Banks are expected to take into account the actual circumstances, limitations, and practical difficulties faced by cardholders in protecting themselves against frauds and scams.
• Assistance for Vulnerable Customers: Banks should consider assisting vulnerable customers on compassionate grounds.
• Transparency and Communication: If any losses are to be borne by the cardholders, banks must ensure transparency in the process and clearly explain the underlying rationale to the cardholders.

Importance of Customer Awareness

The HKMA highlights the importance of customer awareness in preventing unauthorized transactions. Banks are encouraged to:

• Remind Cardholders of Security Measures: Remind cardholders to safeguard their payment cards, card information, and authentication factors.
• Organize Educational Programmes: Organize collaborative educational programmes on card security and prevention of unauthorised transactions to increase public awareness.

Industry Response

The HKMA will continue working closely with the industry taskforce on major enhancements on card protection to implement a comprehensive package of measures to further strengthen protection for card customers.

Quote from Arthur Yuen, Deputy Chief Executive of the HKMA

“We urge all banks to take these guidelines seriously and work together to prevent unauthorised transactions and protect our customers from financial losses.”