Issue link: https://maltatoday.uberflip.com/i/1523590
4 maltatoday | SUNDAY • 7 JULY 2024 NEWS MATTHEW VELLA mvella@mediatoday.com.mt MALTA'S financial services arbiter has said Malta is seeing a growing trend of bank account hacking by third parties, reflecting a problem that has become in- creasingly prevalent worldwide. Scammers are employing sophisticat- ed tactics, the Arbiter for Financial Ser- vices Alfred Mifsud – a former Central Bank deputy governor – said, such as using the bank's identity, including its standard customer care mobile number or website, to deceive account holders and elicit vital data that enables them to access the account and withdraw funds, sometimes repeatedly. According to data provided by the po- lice to the OAFS, over 1,000 individu- als in Malta have fallen victim to such scams, resulting in a loss of €20.8 mil- lion over 2022 and 2023. "These scams were diverse, ranging from emails claiming to be from the victim's clients to online purchases gone wrong and even emotional manip- ulation that left victims financially and psychologically distressed," the OAFS said in its annual report, adding that the financial losses are often significant, ranging from a few hundred euros to several thousand. "Unfortunately, the banks' efforts to retrieve the fraudulently withdrawn money rarely succeed, leaving victims in a difficult position. "This situation often prompts account holders to turn against their banks, ar- guing that they should have a 'structure' in place to alert customers about the dangers of engaging with hackers," the OAFS said. Faced with many such cases, the Ar- biter devised a model to apportion lia- bility for the financial loss sustained be- tween the bank and the account holder. "As scams continue to evolve and be- come more sophisticated, it is crucial for consumers to remain vigilant and for banks to implement robust security measures to protect their customers," the Arbiter writes in his annual report. "Investment fraud, particularly those involving crypto-assets, has significant- ly risen in recent years, with scammers exploiting the hype surrounding these technologies to deceive investors." According to the OAFS, scammers are also increasingly targeting younger demographics, with social media plat- forms serving as a breeding ground for various types of fraud. In one case, a victim received an SMS message, proceeded to click on a link in the message, and provided login creden- tials on a website mirroring a bank's on- line domain. Two payments were made, defrauding the person of €19,150. But the recovery of funds lost to scams remains a daunting task for victims, with the irreversible nature of certain transactions, such as crypto-assets, making it particularly difficult to re- trieve stolen money. The responsibility allocation mod- el developed by the Arbiter has been well-received and adopted by Malta's largest banks, the OAFS said. In the case of the fraudulent text messages, the bank argued that the complainant acted with gross negligence by giving away credentials. The Arbiter attributed an initial 90% responsibility to the bank, because the fraudster had used the same SMS chan- nel normally used by the service provid- er, making the fraudulent message ap- pear genuine. Additionally, the victim was in regular contact with the bank regarding a home loan, which made the fraudulent SMS less suspicious. These special circumstances shifted respon- sibility to the bank, and given that the victim had not made similar genuine payments in the previous 12 months, indicated that the bank's monitoring systems should have flagged the trans- actions as suspicious. While this decision has been appealed by the bank, the OAFS insisted that the model's effectiveness is evident because most new cases are being resolved with- out formal adjudication, either at the pre-mediation or mediation stages, and that banks proactively apply the mod- el's principles. The model has also attracted interest from financial ADR forums across Eu- rope and internationally. FOR SALE QUAD BIKE BOMBARDIER 650CC (2006). My black and yellow beautiful almost immaculate, always serviced quad is, with a heavy heart for sale. She is licensed till October 2024 and road ready. It's now time for someone else to enjoy. Annual road is €259. Asking price is €3500. Call or WhatsApp on 79990807. Over 1,000 lose €20 million in banking scams Data provided by the police to Arbiter for Financial Services finds over 1,000 individuals in Malta have fallen victim to phone- banking scams, a loss of €20.8 million over 2022 and 2023 Warnings from the Arbiter "Consumers need to exercise caution when engaging in online transactions, be wary of unsolicited offers or requests for personal information and immediately report any suspicious activity to the appropriate authorities. "Scammers constantly evolve tactics, staying one step ahead of the industry and its regulators. "Another area of concern is where losses are suffered by retail investors who are duped by fraudsters to participate in get-rich-quick schemes that involve the purchase and transfer of crypto assets via a Virtual Financial Asset (VFA) exchange. "Complainants try to recover their losses by blaming VFAs for not protecting them from their follies. Current legislation does not provide similar protection in the crypto payments area as that applicable for payments under normal currency payments through licensed banks and financial intermediaries. The Arbiter has recommended that VFAs, at the onboarding stage, make more rigorous KYC procedures, especially where unsophisticated investors are involved, and even bring to their attention the high risks of fraud schemes via crypto payments by referring them to cases decided by the Arbiter."