Financial Crime World

Title: Hong Kong Tackles Credit Card Fraud: Government’s Measures to Strengthen Security and Protect Cardholders

Background

Following a worrying rise of 45.1% in credit card fraud cases in Hong Kong this year, the Hong Kong Government was questioned in the Legislative Council about measures to strengthen credit card security and protect cardholders’ personal information.

Questions from The Hon Shang Hailong

Requests to Financial Services and the Treasury (Mr. Joseph Chan)

In response to the alarming increase in credit card fraud, The Hon Shang Hailong raised several questions to the Acting Secretary for Financial Services and the Treasury:

  1. Request for Code of Banking Practice Update or Amendment: Will the Government request the Hong Kong Association of Banks and the DTC Association to update the Code of Banking Practice or amend existing legislation to strengthen monitoring of credit card issuers and ensure they adopt rigorous security standards?
  2. Public Education: How will the Government enhance public education through websites and social media to inform credit card holders about security practices, such as activating two-factor authentication?
  3. Collaboration with IT Professionals and Innovative Technologies: Will the Government collaborate with banks and the banking sector to encourage the adoption of innovative technologies that allow real-time monitoring and alerts for cardholders?
  4. Strengthening Cooperation: How will the Government strengthen cooperation among credit card issuers, banks, and IT professionals to combat credit card fraud and protect data security?

The Government’s Response

Measures Already Implemented

The Hon Joseph Chan, on behalf of the government, responded as follows:

  1. to 3. The Hong Kong Monetary Authority (HKMA) and banks have already taken steps to strengthen credit card security. In April 2023, two new circulars were issued:
    • The first requires banks to perform additional authentication when binding credit cards to mobile payment apps.
    • The second reiterates the need for fair handling of unauthorized payment card transactions, taking into account customers’ circumstances and efforts to safeguard their credit cards.
  2. The HKMA is exploring additional measures to further protect credit card customers through a taskforce with the Hong Kong Association of Banks.

Current Initiatives

  1. Information Sharing: The HKMA, HKPF, and major retail banks have formed the Fraud and Money Laundering Intelligence Taskforce to identify and report suspicious accounts through information sharing and data analytics.
  2. Innovative Approaches: The HKMA and HKPF co-hosted a high-level sharing session with retail banks to explore innovative approaches to anti-deception and interception of illicit proceeds.
  3. Public Education: The HKMA, in collaboration with banks and stakeholders, regularly updates promotional and educational programmes to remind the public about safe handling of sensitive personal information and authentication factors, particularly when using online banking services.
  4. Anti-Fraud Search Engine: The HKPF launched the anti-fraud search engine ‘Scameter’ in October 2022 to enhance the prevention, detection, and deterrence of frauds within the community and reduce financial losses for members of the public.

Conclusion

Banks in Hong Kong have adopted advanced technologies, such as big data analytics and machine learning, to detect and monitor suspicious transactions and alert cardholders. The HKMA will continue to promote adoption of these technologies to enhance customer protection. Moving forward, public education will remain a priority and cooperation among stakeholders will be crucial in maintaining credit card security and protecting cardholders’ personal information.