According to the Police, Malaysians lost RM 305.9 million through scams between 2021 and August 2023. Who is responsible?
In Malaysia, almost always, the consumers are held responsible. He is blamed for his greed, his fears, his ignorance or his lack of digital skills. Thus when he loses his money he has to bear the full financial responsibility. No one else shares his loss.
Yet, what if others were also at fault. For example, what if the bank had failed to send outgoing transaction alerts to consumers. Should they be also held partly responsible?
In many developed jurisdictions, banks are often also held accountable if they fail to implement appropriate measures to protect consumers from scams.
More recently, our neighbor, Singapore, through the Monetary Authority of Singapore (MAS) is developing a Shared Responsibility Framework. The MAS authorities acknowledge that the responsibility of preventing scams should not lie solely with consumers but also with industry stakeholders.
In fact MAS has stated clearly that the industry players bear responsibility for scams ahead of consumers if they fail to meet prescribed anti-scam duties. They suggest a “waterfall” effect with banks being held responsible, then telcos and then only finally consumers.
Most certainly consumers must exercise vigilance at all times and take preventive and precautionary measures to protect themselves. For example this would certainly include not clicking on any unsolicited suspicious links. Although consumers may have difficulty to clearly identify with certainty what exactly a “suspicious link” is. Links in the past that were scams included maid services and purchases of vegetables. It is certainly not easy to clearly identify “suspicious links”.
Bank Negara has already imposed certain measures and guidelines that banks need to adhere to protect consumers from scams. These measures could of course be farther strengthened. Some progressive banks have installed these Bank Negara measures as well as implemented additional measures to mitigate the risks to consumers. Yet, others have been slow to act.
MAS has set out discrete and well-defined scam duties for financial institutions and telcos. The failure to fulfil these duties would render these companies responsible for compensation to their customers. Such a move will certainly incentivize financial institutions and telcos to strictly uphold the desired standards of anti-scam controls.
FOMCA suggests that Bank Negara Malaysia similarly develops well-defined anti-scam standards that Banks must strictly adhere to. Failing which in the case when a customer is a victim of scam, the financial institution should share the responsibility and bear part of the losses suffered by the consumer.
Holding banks responsible would certainly incentivize the financial institutions to implement the proposed measures to ensure enhances consumer protection. Perhaps, Malaysian banks should go father and play a greater role in financial literacy programmes especially focusing on how consumers could identify possible scams and more importantly how to protect oneself from scams. Awareness against scams should be an on-going awareness process.
Interestingly MAS also is exploring the role of telcos in preventing scams. The Malaysian Communications and Multimedia Commission (MCMC) should also look into the role of telcos in mitigating the risks of scams to consumers by imposing anti-scam measures by telcos.
Consumers should certainly exercise vigilance to protect oneself from scams. But clearly, as the global community is begin to recognize; consumers are not the only ones to blame. Financial institutions and telcos equally share the blame. In fact according to MAS, in scams the first ones to be held accountable are the banks, secondly the telcos and only finally the consumers.
