KUALA LUMPUR – The Consumers’ Association of Penang (CAP) has urged the government to avoid pressuring elderly individuals into adopting online banking or cashless transactions, warning that cognitive challenges in older adults could increase their vulnerability to scams.
“We urge the government not to pressure elderly individuals into adopting online banking or cashless transactions,” CAP president Mohideen Abdul Kader told Scoop.
“Many elderly people may face cognitive challenges, increasing their vulnerability to scams.”
Mohideen’s comments come amid growing public concern over the accountability of financial institutions (FIs) in scam cases, particularly spoofing scams, which have surged in recent years.
Highlighting the need for a shared responsibility approach, CAP called for stronger regulations to ensure that financial institutions are held accountable when their negligence contributes to scam-related losses.
“Financial institutions should be held accountable if spoofing scams result from their negligence,” said Mohideen.
“When a scam is reported, the FI must take immediate remedial action. If the FI is at fault, it should reimburse the affected customer for their losses.”
Instances of negligence, according to CAP, include poor data security measures, staff misconduct such as leaking personal data, and delays in addressing known vulnerabilities in online banking systems. CAP also stressed the importance of blocking suspicious transactions as a basic safeguard.
The association pointed to Singapore as a potential model for reform. The Monetary Authority of Singapore (MAS) and the Infocomm Media Development Authority (IMDA) recently introduced the Shared Responsibility Framework (SRF), which holds both financial institutions and telecommunications providers accountable for scam losses.
Mohideen suggested Malaysia consider adopting similar guidelines, which could also include preventive tools like scam-filtering apps such as Whoscall or Truecaller.
The call for greater accountability comes on the heels of a high-profile case involving HSBC in Australia, where the bank is being sued for RM 64 million, for failing to protect 950 customers from a long-standing spoofing scam.
The case has sparked international conversations about the responsibilities of banks in protecting customers from scams.
CAP also noted that Malaysia currently lacks the robust regulations necessary to hold financial institutions accountable for scam-related losses.
“Yes, stronger laws and regulations are needed. This includes preventing the misuse of personal data within FIs and enhancing data security protocols to protect customer information,” Mohideen said.
The association emphasised that investigators of FI-related scams must carefully evaluate each case’s circumstances before assigning responsibility.
In addition to regulatory reforms, CAP stressed the need for increased consumer awareness. Cap recommends customers to be cautious of investment offers promising high returns, refuse to share personal or banking information over the phone, and insist on resolving any alleged issues in person at the relevant agency or bank office when contacted by callers claiming to represent government agencies or Bank Negara Malaysia (BNM).
While CAP supports the push towards digitalisation in banking, it warned that the transition must be inclusive and considerate of vulnerable populations, especially the elderly.
“The shift to a cashless society should not come at the expense of those who may struggle to adapt,” said Mohideen. “Protecting these individuals from scams must remain a priority.”
The association hopes that Malaysia will take meaningful steps to address these concerns, ensuring that financial institutions, government bodies, and consumers work together to reduce scam risks and protect vulnerable communities. – December 20, 2024