TELCOS, DIGITAL PLATFORMS MAY BE INCLUDED IN FRAUD COMPENSATION IN THE FUTURE, SAYS BNM

KUALA LUMPUR, March 31 (Bernama) - Telecommunication service providers and digital platforms,  which play a critical role in the digital ecosystem, may be included in compensating scam victims in the future besides only banks and financial institutions now.

This would further strengthen consumer protection and uphold accountability across all parties, Bank Negara Malaysia (BNM) said in its 2025 Annual Report released here today.

“There is merit for Malaysia to consider broadening participation in fraud compensation to include telcos and digital platforms,” the central bank said in a box article on “Fraud Resolution: Building Trust Through Shared Accountability.” 

BNM said the approach taken in other countries where these two parties are covered in their compensation frameworks also “gives us additional frontiers to consider.”

In Malaysia, consumers lost RM2.8 billion to scams last year while globally, losses amounted to US$442 billion in 2024.

This raises the important question as to who should take responsibility and bear the losses when fraud happens, be it the financial institution, the consumer or should the responsibility be shared more broadly across the digital ecosystem.

For Malaysia, BNM introduced a compensation framework in 2024 through the Policy Document on Ensuring Fair Treatment for Victims of Unauthorised e-Banking Transactions (SEFT).

The policy currently focuses on unauthorised transactions.

The central bank said it would also explore stronger protection for vulnerable consumers, including assessing whether expanding SEFT’s scope would help address the risks faced by this group while accounting for the level of digital financial literacy and fraud landscape in Malaysia.

Under the principle of joint responsibility, there would be full compensation if the fraud loss is solely caused by gaps in the bank’s security controls.

Nevertheless, “compensation is not guaranteed in all cases,” the central bank said.

There would be partial compensation if the consumer shares some fault and the bank does not act fast to stop further losses after the first fraud attempt.

However, there would be no compensation if the bank has acted as required and the consumer is solely at fault (for example, download harmful mobile applications despite prior warnings) or the consumer refuses to cooperate in the investigation.

In protecting oneself from scams, BNM reiterated its advise to consumers to pause before they act, check before they click, keep passwords private and report fast by calling the bank’s hotline or National Scam Response Centre at 997 to report any suspicious activity.

-- BERNAMA