Financial Crime World

Hong Kong Banking Industry Reinforces Credit Card Fraud Protection Measures

In response to a surge in consumer complaints regarding credit card fraud, the Hong Kong Monetary Authority (HKMA) has announced new safety measures designed to bolster the security of local credit card transactions.

Escalating Consumer Complaints and New Safety Measures

At a media briefing, HKMA Deputy CEO Arthur Yuen Kwok-hang announced seven new measures the banking industry must adopt in the coming months to address consumer concerns. These measures include:

  1. Confirmation from clients on credit card activities
  2. Mandatory client consent for spending limit changes
  3. Enhanced verification protocols for online transactions

Rising Number of Credit Card Fraud Complaints

According to HKMA, there have been 382 complaints about unauthorized credit card transactions between January and May 2023. This represents a marked increase compared to the 391 complaints recorded in the entire previous year and a notable surge from the mere 51 cases reported in 2019.

Shift to Online Shopping and Increased Risk of Unauthorized Transactions

The recent rise in incidents can be partly attributed to the shift in purchasing behavior prompted by the Covid-19 pandemic. More people have turned to online shopping instead of making purchases in physical stores, increasing the potential for unauthorized transactions.

Immediate Action to Suspend or Block Stolen Credit Cards

To better safeguard customers’ interests, banks will allow them to immediately suspend or block their credit cards using mobile phone apps in case they are stolen or lost.

Dedicated Teams to Manage Unauthorized Credit Card Transactions

The regulators plan to set up dedicated teams within banks to manage unauthorized credit card transactions. This move follows an investigation into a series of suspected credit card fraud cases, which saw affected cardholders raising concerns on social media about unauthorized transactions made in foreign currencies. The implicated bank, Standard Chartered, has pledged to offer refunds for validated cases.

The Prevalence of Credit Card Fraud in Hong Kong

When asked about the prevalence of credit card fraud in Hong Kong, Yuen acknowledged that the issue is not exclusive to the region. However, the HKMA is determined to take steps to address the matter and protect customers from potential financial harm.

Subheadings

  • HKMA Announces Seven New Credit Card Fraud Protection Measures
  • Rapid Increase in Unauthorized Credit Card Transactions
  • Shift to Online Shopping Increases Risk
  • Immediate Action to Suspend or Block Stolen Credit Cards
  • Dedicated Teams to Manage Unauthorized Transactions
  • Acknowledgment of Widespread Credit Card Fraud Issue

Bullet Points

  • HKMA received 382 complaints about unauthorized credit card transactions between January and May 2023.
  • This represents a marked increase compared to the 391 complaints recorded in the entire previous year and a notable surge from the mere 51 cases reported in 2019.
  • Seven new measures for credit card fraud protection.
  • Banks must require explicit consent from customers for certain transactions, effective June 1.
  • Customers must approve any adjustments to their credit card spending limits.
  • Banks must verify clients’ approval before processing transactions that exceed spending limits.
  • Allow customers to immediately suspend or block their credit cards using mobile phone apps.
  • Encourage merchants to adopt mobile electronic terminals instead of traditional card swiping.
  • Set up dedicated teams within banks to manage unauthorized credit card transactions.