Borrowers handing bank cards to third parties triggers severe criminal charges

UNWARY borrowers who surrender their financial documents and debit cards to third parties as collateral face severe criminal prosecution and multi-year prison sentences under Malaysian law.

Legal practitioner Dr Mahmud Jumaat warned that transferring hire purchase agreements depends strictly on contract clauses, while granting unauthorised access to personal bank accounts constitutes a definitive criminal offence rather than a mere civil dispute.

"Many do not realise that their action of handing over a debit card as loan 'collateral' actually exposes them to criminal charges. A bank card, for instance, is not a purely civil issue; this is a crime that can lead to imprisonment," Mahmud told Harian Metro.

The warning follows a disturbing front-page exposé detailing how a sophisticated syndicate has systematically targeted desperate borrowers.

The Islamic Consumer Association of Malaysia (PPIM) disclosed it received over 100 cases during the last five years where assets belonging to borrowers were illicitly transferred to illegal moneylenders. The association alleges the network involves legal practitioners, public servants, and influential figures, running up total losses exceeding RM50 million.

Mahmud explained that under Section 424A of the Penal Code, anyone who, without lawful authority or purpose, possesses or controls a payment instrument or bank account belonging to another person faces a fine between RM5,000 and RM50,000, a prison term ranging from 6 months to 5 years, or both.

Crucially, the legal expert reminded the public that the individuals who willingly give away their bank cards are equally liable to face prosecution under the law.

"Section 424B of the Penal Code provides that anyone who directly or indirectly, without lawful authority or purpose, gives possession or control of a payment instrument or their account at a financial institution to any other person, can be fined not less than RM10,000 and not exceeding RM100,000, or imprisoned between 1 and 7 years, or both," Mahmud cautioned.

He added that when a person hands over their bank card to loan sharks or third parties, the account is frequently weaponised to facilitate illicit transactions without the knowledge of the original owner.

"However, it is the account owner who will face police investigations and potentially be charged as an 'account mule' or for involvement in money laundering," he added. - June 21, 2026