Proposed law to make financial institutions accountable for negligence

In a proposed law, financial institutions may be held accountable for negligence, along with the implementation of a “kill switch” to enhance digital security and combat online fraud, according to M. Kulasegaran, the Deputy Minister in the Prime Minister’s Department (Law and Institutional Reforms).

Kulasegaran mentioned that the upcoming law will address the actions to be taken against negligent financial institutions, emphasizing the importance of holding them responsible for their actions.

Responding to a question by Khoo Poay Tiong (PH-Kota Melaka), Kulasegaran stated that the government is currently drafting the new Act, which will include provisions for a kill switch to elevate digital security in response to the advancements in artificial intelligence and the increase in cybercrime.

Additionally, he mentioned that the government is reviewing existing laws such as the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, Penal Code, and Criminal Procedure Code to explore ways to return funds to victims of scams.

Highlighting the severity of the issue, Kulasegaran revealed that a total of RM3.2 billion was lost to online scams between 2020 and 2023, involving 107,716 cases, and assured that comprehensive measures are being implemented by the government to address the problem.

One of the initiatives includes the establishment of the National Scam Response Centre (NSRC) in October 2022, as well as the implementation of the 997 hotline to report fraudulent activities.

Kulasegaran mentioned the collaborative efforts involving various entities like the police, Bank Negara, the Malaysian Communications and Multimedia Commission, National Anti-Financial Crime Centre, financial institutions, and telecommunications companies to combat scam activities effectively.

He noted that the NSRC, through the MCMC, has identified phone numbers linked to fraudulent activities with the cooperation of telecommunications companies, leading to the blocking of 131 numbers and deactivation of 93 others due to suspicious behavior.

Responding to Dr. Siti Mastura Muhammad’s inquiry about the reported losses from scams between 2020 and last year, Kulasegaran reiterated the government’s commitment to addressing the issue and implementing measures to safeguard individuals from falling victim to scams.