LETTERS: Police say Malaysians lost RM305.9 million to scams between 2021 and August 2023. Who is responsible?
In Malaysia, consumers are always held responsible. They are blamed for their greed, fears, ignorance or lack of digital skills. Thus, when they lose their money they have to bear the full financial consequences.
Yet, what if others are also at fault? For example, what if the bank had failed to send transaction alerts to consumers? Should banks be also held partly responsible?
In many developed jurisdictions, banks are often also held accountable if they fail to implement measures to protect consumers from scams.
Our neighbour, Singapore, is developing a Shared Responsibility Framework.
The Monetary Authority of Singapore (MAS) acknowledges that preventing scams should not be the sole responsibility of consumers but also industry stakeholders.
In fact, MAS has stated that industry players bear responsibility for scams ahead of consumers if they fail to meet prescribed anti-scam duties. They suggest a "waterfall" effect: banks being held responsible, then telecommunications companies (telcos), and finally, consumers.
Consumers must exercise vigilance at all times and take measures to protect themselves. This would include not clicking on unsolicited and suspicious links. (They may have difficulty identifying a suspicious link, though.)
Bank Negara Malaysia already requires banks to implement certain measures to protect consumers from scams. These measures can, of course, be strengthened. Some progressive banks have taken additional steps to mitigate the risks to consumers. Yet, others have been slow to act.
MAS has defined the anti-scam obligations of financial institutions and telcos. Failure to fulfil these duties would render these companies responsible for compensating customers. This incentivises financial institutions and telcos to strictly enforce anti-scam standards.
The Federation of Malaysian Consumers Associations suggests that Bank Negara Malaysia also develops well-defined anti-scam standards that banks must adhere to. If a bank fails to do so, they should bear part of the losses suffered by the consumer.
Perhaps Malaysian banks should go further and play a greater role in financial literacy programmes, especially focusing on how consumers can identify scams and, more importantly, how to protect oneself from scams.
Interestingly MAS is also exploring the role of telcos in preventing scams.
The Malaysian Communications and Multimedia Commission should also look into the role of telcos in mitigating the risks of scams to consumers.
PAUL SELVA RAJ
Deputy president, Federation of Malaysian Consumers Associations
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times