Thailand's war on scams adds new allies
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Thailand's war on scams adds new allies

A new law is expected to make telecom companies and financial institutions more responsible for cybercrime victims' losses, but determining accountability and compensation will likely be on a case-by-case basis

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Telecom firms say they are prepared to comply with the law, though they are waiting for the details of the amendment to be revealed.
Telecom firms say they are prepared to comply with the law, though they are waiting for the details of the amendment to be revealed.

The amended 2023 emergency decree on measures to prevent and suppress cybercrime is expected to take effect this month, requiring financial institutions and telecom operators to share greater accountability for victims of scam losses.

Yet the updated rule might not guarantee affected consumers will be compensated as the incidents could be considered on a case-by-case basis.

The new rules are expected to have a limited impact on the telecom and banking sectors, according to analysts.

Digital Economy and Society Minister Prasert Jantararuangtong said the bill is expected to be presented to the cabinet this week. The full details of the amendment will be unveiled after it is published in the Royal Gazette.

Mr Prasert said in principle, the law aims to ensure all parties take greater responsibility for customers affected by scams.

The law applies to financial institutions, telecom operators, and social platforms and websites, he said.

The government wants suspicious mobile phone messages promptly removed by network operators or they will be held responsible if these messages lead to a customer losing money to scammers, Mr Prasert said.

He said if financial institutions fail to ensure adequate preventive systems and consumer financial losses result from mule bank accounts, the institutions will be held financially responsible to the victims.

This kind of legal mechanism has been used in other countries such as Singapore, said Mr Prasert.

The government expects the revamped law to speed up the tracking, freezing, and return of money to victims, he said.

CONSIDERED CASE-BY-CASE

Wisit Wisitsora-At, the ministry's permanent secretary, said this does not mean victims will always receive compensation, as they will be considered on a case-by-case basis.

In addition, people who were conned must consider to what extent they were negligent in allowing the scam to occur, he said.

Mr Wisit said the amended law includes a scope of supervision over related parties' responsibility, and guidelines to shut down websites that violate the law.

The ministry held discussions with all related parties during the amendment's preparatory process, he said.

Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), said the company is ready to comply with the law.

Chakkrit Urairat, chief corporate affairs officer at True Corporation, said the company agreed to share responsibility for scams, though it is too early to comment as the amendment has yet to be unveiled.

Mr Chakkrit said mobile networks must properly and strictly register SIM cards based on customers' ID cards.

Banks must also strictly verify customer information when opening new bank accounts, he said.

The institutions that link customers' accounts to their mobile banking accounts must process the linkage carefully to avoid the problem of mule accounts, said Mr Wisit.

As for service users, they must be aware of the basic information and mechanisms for using the service and avoid careless actions, he said.

"I think it is a complicated matter to decide who will be held responsible in general because it has to be considered on a case-by-case basis," said Mr Chakkrit.

A telecom industry veteran who requested anonymity said the law may allow for the establishment of a joint working group to consider liability for damages.

SHARED RESPONSIBILITY

Kattiya Indaravijaya, chief executive of Kasikornbank (KBank), said the bank is ready to cooperate with the government and regulatory agencies to enhance cybersecurity measures.

She said KBank is committed to complying with new laws and regulations designed to prevent financial scams.

Regarding the issue of shared responsibility in cases of financial fraud, Ms Kattiya emphasised that all related parties, including financial institutions, telecom companies and consumers, should share responsibility based on problems that arise.

"Shared responsibility is not an issue for the bank. Accountability should be determined on a case-by-case basis, grounded in problems as they arise," she said.

"There must be a reliable and transparent verification process, similar to the frameworks in Singapore and Malaysia."

In Singapore, the Shared Responsibility Framework was first proposed in 2023 and came into effect on Dec 16, 2024. It was jointly developed by the Monetary Authority of Singapore and the Infocomm Media Development Authority.

KBank, Thailand's third-largest lender by total assets and the industry leader in mobile banking with a 30% market share of digital banking transactions, recently completed an upgrade of its core banking system.

The bank's mobile banking app, K-Plus, doubled its capacity with the upgrade.

K-Plus has 22.8 million users and plans to increase the figure to 23.9 million by year-end, said Ms Kattiya.

"In addition to enhancing digital transaction capacity, the technology upgrade strengthens our security systems," she said.

Payong Srivanich, chairman of the Thai Bankers' Association, said the group is awaiting details of the amended law.

The association expects the law to cover the responsibilities of all relevant parties, including regulators, and address every stage of financial scams: upstream, midstream and downstream.

"Telecom providers, banks, the currency sector and related regulatory agencies should work together to share this responsibility. Effective law enforcement is also a crucial factor in preventing financial scams," said Mr Payong.

LIMITED IMPACTS

Krungsri Securities (KSS) expects the amended law to have a limited impact on Thai banks and telecom firms.

The major amendments include greater penalties for offenders and more liability for financial institutions and telecom service providers if they neglect or fail to properly maintain their systems.

The amendments could be effective starting this month.

The wording "neglect or fail to properly maintain systems" is a broad definition intended to hold banks and telecom firms liable, KSS analysts said in a research note.

"Our conversations with several banks and telecom firms suggest they already have robust systems and measures to flag and/or block possible online fraud or scams," said the brokerage.

The operators covered by KSS have implemented measures to flag online fraud and scams, including systems to detect and block fraudulent messages supposedly from large organisations such as banks.

"This makes it more difficult for scammers to send messages with links that appear to be from reputable organisations," said the KSS analysts.

"Thailand also requires telecom firms to verify the identity of SIM card buyers, with additional verification for subscribers of six or more SIM cards."

According to the brokerage, most banks in Thailand already have basic fraud/scam prevention systems in place, including an automatic fraud warning message before a customer conducts an online financial transaction, as well as identity verification for transfers exceeding 50,000 baht.

Banks are also required to verify the identity of new customers and conduct facial scan verification before a customer conducts a transaction.

Given these precautions, KSS believes "most banks have the capacity to comply with additional requirements under the amended law".

As a consequence, the brokerage sees limited downside to its earnings forecasts for the information and communication technology sector as well as banking if Thailand increases cybercrime penalties and liability for these segments.

HOPEFUL LAW

The new law will be a powerful tool forcing businesses to step up their efforts in dealing with cybercrime, said Apichit Prasoprat, vice-chairman of the Federation of Thai Industries.

If banks and telecom operators' ongoing measures against scammers are not strong enough, this law should be able to help, he said.

"I am confident this law will considerably reduce online scams that threaten to cause huge damage to the Thai economy," said Mr Apichit.

"Cybercrimes also affect society and people's quality of life, with the elderly and retirees living on pensions often victims."

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