Banks told to adopt more measures to protect customers from online fraud
The Hong Kong Monetary Authority (HKMA) will require the local banking industry to enhance the security of credit card transactions after consumer complaints about online fraud multiplied this year.
Lenders must obtain confirmation from clients on certain credit card activities and their consent on changes affecting their spending limits, HKMA deputy chief executive Arthur Yuen Kwok-hang said.
These are among seven measures to be implemented over the next few months following consultation with the industry.
For a start, all banks will have to verify with customers on requests for linking their mobile phone numbers with various online payment apps such as ApplePay or GooglePay, with effect from this month.
Previously, banks only needed to send a text message to notify their customers after such activity had been made.
“We have found an increasing number of complaints on unauthorised transactions in recent years,” Yuen said at a media briefing. “Most of them are related to online payment by credit cards. Banks need to do more to [protect] their customers.”
The HKMA said it received 382 complaints about unauthorised credit card transactions in the first five months of this year, compared with 391 in all of last year. That is also more than seven times the 51 cases in 2019 before the Covid-19 pandemic struck. There were 329 complaints in 2021, according to official data.
“The pandemic has led more people to use their credit cards for online shopping,” Yuen said. “This has increased the chances of unauthorised payments.”
Banks in Hong Kong would need to get customers’ consent before allowing any changes to their spending limits, the HKMA said. They would also be required to seek their confirmation before approving transactions that breached those limits, Yuen added.
Banks will need to allow customers to use mobile phone apps to immediately suspend or block their credit cards as well in case they are stolen or lost, a move that could stem potentially bigger losses from these situations.
The HKMA and the lenders will encourage business operators or merchants to use mobile electronic terminals for customers to pay for their purchases.