Home Crime Hong Kong Launches Automatic Fraud Alerts to Combat Financial Scams

Hong Kong Launches Automatic Fraud Alerts to Combat Financial Scams

Hong Kong Financial Scam Alert System

Starting Sunday, users attempting to transfer money to potentially fraudulent accounts will receive automatic alerts through online banking, mobile apps, and at bank counters. This initiative, launched in collaboration with 32 banks and 10 stored-value facilities, aims to combat a troubling rise in investment scams that have cost victims over HK$1 billion this year alone.

Authorities have rolled out the second phase of the “Suspicious Account Alert” system, expanding its coverage from 35% to an impressive 84% of fund transfers. The system will notify users if a payee’s identifiers—such as mobile and account numbers—are flagged as “high risk” in the police’s anti-scam database, Scameter. Users will then have the option to either proceed with or cancel the transaction.

Raymond Lam Cheuk-ho, chief superintendent of the police’s cybersecurity and technology crime bureau, noted that since its inception in November 2023, the system has already issued more than 655,000 high-risk alerts.

The initiative is augmented by the Scameter+ app, which provides timely warnings about fraudulent bank websites and phone numbers. “Fraudsters can trick you into inputting credit card information into malware that evades bank detection systems,” warned Chiu Tsz-wai, acting head of banking supervision at the Hong Kong Monetary Authority (HKMA).

To enhance security, Chiu advised that online credit card transactions should be conducted through banking apps rather than relying on SMS one-time passwords.

Despite a decrease in general fraud-related banking complaints—350 received from January to June, down 45% from last year—the rise in online investment scams is concerning. There were 1,822 such cases recorded in the first half of 2024, compared to 1,645 in the same period last year, resulting in losses exceeding HK$1.09 billion.

Carmen Chu Lap-kiu, executive director of banking supervision at HKMA, reported a 16% increase in authorized push payment fraud, particularly targeting investment and romance scams. “The modus operandi is evolving. Fraudsters have shifted from focusing on passwords to manipulating victims’ psychology,” she explained, highlighting a 30% increase in financial losses compared to the previous year.

The Office of the Privacy Commissioner for Personal Data has also raised alarms about fraudsters employing deepfake technology to impersonate government officials and celebrities. The agency urged the public to exercise caution and refrain from sharing personal information online. Nearly 600 inquiries related to fraudulent activities targeting personal data were received in the first half of the year, marking a nearly 90% increase from last year.

Additionally, police have made significant strides in combating fraud, arresting 15 individuals connected to local telephone deception syndicates. Among those arrested, some are believed to have triad affiliations. These syndicates allegedly scammed HK$26.5 million using “Guess who” and “Pretend officials” schemes, with specific operations generating HK$26 million and HK$550,000, respectively.

As Hong Kong intensifies its fight against financial fraud, the automatic alert system represents a crucial step in safeguarding residents against increasingly sophisticated scams.