PETALING JAYA: Legal experts agree with the authorities that Malaysia is in need of a new law allowing the police to freeze bank transactions to protect scam victims.
However, if there are plans for such legislation, they want the government to factor in consumers’ privacy rights, as was suggested in Singapore.
Criminal lawyer Rajsurian Pillai said he agreed that such a proposal was needed because Malaysia has become a hotbed for online authority impersonation and digital scams in recent years.
“Monetary losses suffered by victims have numbered in the millions and are growing rapidly.
“Many victims are from vulnerable backgrounds with limited digital literacy, such as the elderly.
“In most of the cases, the victims willingly transfer money out of their bank accounts,” he said when contacted yesterday.
On Nov 11, Singapore proposed enacting new legislation empowering the police to order banks to restrict a potential scam victim’s bank transactions, including online banking, PayNow and automated teller machine (ATM) facilities.
The law, if passed, will be the first of its kind in the world.Rajsurian added that many victims had been unaware that they were being scammed until it was too late.
“Such legislation will allow the police to order banks to halt such transactions to prevent such transfers and stop scams from taking place.
“I would equate it to nipping the issue in the bud.
“This will be among other proactive measures to protect people from being scammed.”
The existence of such laws would send a strong message that the government and authorities are taking the scam issue seriously, added Rajsurian.
However, he cautioned that there would be concerns regarding the overreaching powers granted to police to stop transactions.
“Like every power, there is potential for misuse.
“Privacy concerns are another matter, as the laws would allow authorities to intervene in individual banking matters and accounts.
“They would need to establish a department to handle such matters. This will involve time, training and cost,” he said, adding that public engagement is also needed before such legislation is enacted.
Legal practitioner Datuk Dr Baljit Singh Sidhu also concurred, saying that there is a need to retrain the police force to adapt to the ever-changing nature of scams.
“We need constant training and discussions with all relevant stakeholders, or else they will become ‘toothless tigers’,” he said.
“The government should appoint a special task force to look at other jurisdictions on how to approach the law, including countries such as Singapore.”
He said while laws to prevent scams currently exist, the turnaround time for such cases is still slow.
“We need to include all relevant agencies, such as Bank Negara Malaysia and banking institutions, in the discussion,” he said.
Lawyer Kitson Foong said when it comes to attempts to recover proceeds of scams, the authorities rely on provisions in the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, permitting them to seize proceeds from scams and later releasing funds back to rightful owners.
However, Foong foresees two major hurdles in implementing such a law.
“Firstly, there is likely to be pushback from account holders themselves, as it effectively deprives a person of access to their property (funds).
“A legal provision undermining a person’s right to property as guaranteed in Article 13 of the Federal Constitution runs the risk of being struck down as being unconstitutional by the Courts.
“Secondly, such intrusive legislation would need to reconcile the bank’s duty to honour transactions performed by customers and its corresponding duty as a reporting institution to comply with a ‘restriction order’ issued by the police,” he said.
