On 21 Jun 2024, the HKMA directed retail banks and virtual banks to reinforce anti-bogus call measures, including mandatory internet-based verification, standardized police reporting within 5 working days, customer risk assessment protocols, and enhanced public education. The guidance builds on existing 2015 verification practices while introducing new digital accessibility and reporting requirements to combat fraud-related financial losses.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction
On 21 Jun 2024, the Hong Kong Monetary Authority (HKMA) issued a circular directing retail banks (including virtual banks) and other authorized institutions to strengthen measures against fraudulent telephone calls purporting to represent financial institutions, following a significant rise in public enquiries regarding such scams in 2023.
Verification Measures Enhancement
Retail banks must review and ensure continued implementation of existing measures requiring callers to identify themselves with full names and identifying numbers (e.g., extension or staff numbers), and verify the genuineness of callers via hotlines. Banks are directed to enhance accessibility by extending verification services to internet and mobile banking platforms with appropriate controls.
Customer Protection Protocols
Banks must assess whether customers divulged sensitive personal or financial information during bogus calls and advise immediate police reporting if losses occurred. Prompt follow-up actions, such as temporary service suspension or enhanced authentication, are required to mitigate further financial risks based on the extent of information disclosed.
Standardized Police Reporting Requirements
Retail banks must report identified bogus calls to the Police using a standard template within 5 working days of completing internal checks. Banks are required to obtain and provide detailed call information from enquirers to facilitate police follow-up, with the template to be provided separately by the HKMA.
Customer Awareness and Education
Banks must proactively educate customers on recognizing bogus calls, their potential impacts, and the identity verification measures already in place. Other authorized institutions not conducting retail banking must apply similar measures where practicable to address calls purporting to represent their institutions.
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