Hong Kong in talks with banks on how to freeze scam-linked accounts more swiftly

Hong Kong police and the city’s de facto central bank are in talks with banks about how to more swiftly freeze accounts linked to fraudulent activities, as part of efforts to clamp down on scammers, the Post has learned. A source said the Hong Kong Monetary Authority (HKMA) and local law enforcement had discussed the possibility with the banking sector to help prevent scammers from quickly transferring money out of the city, adding that a trial run was already under way. “But this is only at an early stage as it involves a review of legislation and must balance the status of Hong Kong as an international finance centre,” the insider said. In response to a Post inquiry, the city’s de facto central bank said: “The HKMA is maintaining close dialogue with the banking industry and relevant stakeholders to explore different ways of combating fraud and scams.” But the organisation stopped short of providing any specifics about the arrangement. According to the latest data, 3,149 deception cases were reported to police in January, representing a 2.7 per cent decrease over the same month last year but an 11.8 per cent increase over January 2023. The total amount involved in the reported cases from January this year stood at HK$550 million (US$70.76 million). The figure represented a 17.9 per cent dip from last year, but a sharp increase from the HK$360 million logged for the same month in 2023. Last year, the force’s Anti-Deception Coordination Centre successfully intercepted HK$1.48 billion in fraudulent payments linked to 1,372 deception cases. The centre’s performance for January 2025 has yet to be disclosed. Professor Lee Shu-kam, the head of Shue Yan University’s department of economics and finance, said he believed freezing accounts would prove effective in combating deception cases, a key consideration given the city’s status as an international finance hub. The ability to more quickly freeze accounts could help protect common targets such as elderly residents and new arrivals, he said. He added that cooperation between the HKMA and police in anti-deception cases could put asset owners at ease and boost the city’s reputation as a safe place for the finance sector, even though more stringent enforcement efforts could potentially cause more inconvenience. But Lee urged authorities to strike a delicate balance between scam-prevention efforts and protecting the city’s reputation as an international financial centre. He cautioned against authorities taking a free-rein approach to freezing bank accounts, warning it could divert investors to other financial capitals. Lee highlighted the potential impact on investor confidence, noting that sudden account freezes could disrupt business operations and raise concerns about the availability of funds when needed. “If law enforcers can easily freeze accounts without restrictions, investors may have doubts about the safety of their funds, and they will become afraid that their funds will be frozen at any time, which will really affect their confidence in Hong Kong,” he said. “Investors will worry that if they are suddenly under suspicion without knowing why, their money will be frozen.” The academic said competition among financial centres was intense, especially in terms of funding and overseas investment, adding that excessive enforcement could lead to “a reduction in fund inflows or even outflows” from Hong Kong. He called for greater transparency through a legal framework that would involve the HKMA, in addition to the establishment of effective appeal and resolution mechanisms to mitigate any negative impact on investors. Police recorded 44,480 deception cases last year, an 11.7 per cent increase from 2023. The data also showed 61.8 per cent of incidents reported in 2024 were internet-related. The force attributed the increase in the overall number of cases to scammers adopting a new tactic where they impersonate members of a company’s customer services. The scam strategy accounted for 5,575 of the incidents reported last year. While the number of cases had dropped from more than 1,100 in July of last year to a monthly average of about 500 in the fourth quarter amid a ramping up of law enforcement and public education efforts, authorities have warned scammers remain prevalent. But police noted the rate of the increase in deception cases had slowed down in recent years, standing at 12 per cent in 2024 compared with consecutive rises of more than 40 per cent in 2022 and 2023. The force cited the trend as proof that its efforts, alongside those of stakeholders, were beginning to show signs of results. In 2024, police and the HKMA also expanded the “Suspicious Account Alert” mechanism, which notifies customers before they confirm a transaction, to cover internet banking, physical branch and ATM transactions.

Hong Kong in talks with banks on how to freeze scam-linked accounts more swiftly

HKMA, police discuss options with banks in bid to prevent scammers from quickly transferring money out of city, Post learns

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