Banks must be accountable

Last month, the hunt was on for an elderly embezzler who scammed at least 1.4 billion baht from a respectable savings group. When tracked down, Assoc Prof Sawad Saengbangpla, 79, shrugged and admitted that for the past several years he had run the Chulalongkorn University Savings Cooperative for personal gain. He had lured members of the cooperative to invest in his “government lottery cooperative” and transferred about 1.4 billion baht to himself since 2010. He then paid off debts and took long holidays to gamble on Singapore’s Sentosa island casino until the scam was discovered. Police told depositors in effect, “too bad”, they had lost all their savings.

As always, the banks shake their heads in mock sympathy, but secretly smile because they have no responsibility. In today’s fast-moving economy, ever-more dependent on being linked to banks digitally, Thai finance houses are becoming more and more like the old stereotype. That’s where mean and stingy bankers care exclusively about profits, never about customers. It’s where bankers chuckle as they throw widows out of their homes.

Thai banks are long overdue for a customer-friendly makeover. It is scandalous the Thai Bankers Association (TBA) hasn’t done this itself. It is frustrating and unsatisfactory that the government and the Bank of Thailand have not done so.

Two immediate reforms are badly needed. One is a scheme to protect depositors when money is stolen from their accounts, such as with counterfeit credit cards or forged documents. The other is to make banks and other finance houses and institutions fully responsible when consumers lose money in, or because of, use of mobile banking apps provided and pushed by the industry.

Stories about theft from bank accounts now are legion. Highly organised gangs work around the world, cloning cards, stealing passwords, presenting counterfeit documents. In this criminal world, gang members can steal or buy credit and ATM card numbers, make usable cards and drain an unsuspecting person’s account in a few hours. Banks foolishly and unethically treat this as an “in-house” crime, instead of taking proper steps to help victims and other customers.

More up-to-date countries, with full support from card companies and banks, now fully protect victims of such scams and thefts. Thailand has made no move to do so. Banks, short-sighted and heartless, are happy to see their own customers wiped out. They could reimburse crime victims who trusted the banks to keep their money secure. They could even start insurance schemes against such thefts.

Current practice sees virtually all regulation from the banking industry’s viewpoint. This is wrong-headed and morally wrong as well. A 21st century government should already be insuring all accounts and auditing all financial services. The Ministry of Finance and the TBA owe the public actual explanations of services like PromptPay. While aggressively pushing mobile phone apps on the country, neither the government nor bankers are being at all forthright about the risks involved.

The campaign by the National Broadcasting and Telecommunications Commission to take and store fingerprints from every citizen to use for online banking ID is one of the worst ideas. It comes closer to inviting fraud than preventing it. Indeed, a mobile phone user lost 900,000 baht through simple thievery of his True Move SIM card and ID details. Another lost tens of thousands when a senior executive of the leading mobile phone firm stole details of his identity from a “secure” database — unregulated and unaudited, of course.

These cases were wrongly treated as individual crimes. They are part of an evolving crime scene using updated technology and speed against victims. Banks and other finance houses owe the public full protection against such thieves. And if bankers refuse, the government must force them.

Stories about theft from bank accounts now are legion.