KUALA LUMPUR – Sarawak DAP chairman Chong Chieng Jen (Stampin-PH) urged the government to make it mandatory for banks to compensate 100% of online scam victims’ losses.
During his royal address debate in Dewan Rakyat today, Chong opined that mandatory compensations could push banks to upgrade their online banking security systems and tighten standard operating procedures (SOP) for online transactions.
Since last year, Chong said numerous bank account holders, whose whole life savings are in their accounts, have had their money transferred to third-party accounts without their consent or knowledge.
He further expressed his disappointment over how almost all authoritative parties do not assist the victims or mitigate the prevalent scamming practices.
“Scam victims bring their issues to banks, who neither treat the issues as they should, nor provide any sort of compensation,” he said.
“They then refer their cases to the Ombudsman for Financial Services, who take the banks’ sides.
“Victims file reports to the Royal Malaysian Police, who push the banks to investigate, who then push it back to police. Meanwhile, Bank Negara does not do anything.
“This is a policy matter that has to be decided by the government. A caring government cannot take this lightly and leave victims to face banks and suffer through scams,” he added.
Chong mentioned that Singapore had resolved a phishing scam issue that occurred in December 2021 within six months, adding that its banks compensated victims 100% of their losses as a form of goodwill payment and its police successfully apprehended responsible parties within two months.
Comparing Singapore’s quick action to that of Malaysia, he called out Malaysian police for failing to arrest anyone, banks for not compensating, Bank Negara for its inaction, and the government for constantly “discussing” matters that have been present for years.
“I understand that it was a backdoor government before this, where political leaders stole power,” Chong said.
“But now, it is a legitimate government that is also led by the Finance Ministry. I hope the government curbs this issue quickly, and not let the victims be tortured by both criminals and banks,” he added.
To back his proposal, Chong disclosed that Malaysia’s top six banks have a net profit of RM125 billion altogether, compared to a total of RM2.97 billion in losses to scams.
“If we check the losses of victims, it does not even amount to 3% of banks’ profits – meaning that banks can compensate them for the issue,” he said.
“Scams might amount to small losses for the banks, but for individual account holders, it is their everything,” he said.
Chong reiterated that mandatory compensation will push banks to strengthen their online security, tighten the conditions for opening an account, and improve SOPs for online transfers, thus lessening the likelihood of online scams.
Meanwhile, Chong also proposed that the government lower the imposed overnight policy rates (OPR), as the 1% increment implemented by Bank Negara will burden those who borrow from banks.
He added that household debt has reached RM1.5 trillion, and 1% of the OPR is equivalent to RM15 billion that must be paid to the bank.
Besides being troublesome for the rakyat, he said the OPR rates could weaken the economy. – The Vibes, February 20, 2023
