Georgetown, Penang, MALAYSIA - Sixty people, mainly investors are claiming to have suffered losses totalling some RM25mil in a gold investment scam over the last year, said Penang Commercial Crime Investigation Department head ACP Roslee Chik.
He said the police had received 30 reports so far from investors who allegedly fell victim to the scam, operated by a company here.
“The company’s modus operandi was to sell 1kg gold bars at market price of between RM135,000 and RM150,000 each.
“Interestingly enough, the company also offered the buyers a dividend of 3% of the gold price for three months,” he told a press conference here Tuesday.
Roslee said the company would then pay the 3% dividend on the first two months before offering to buy back the gold bars from the buyers on the third month.
“When a buyer agrees to sell back and has handed over the gold bars, the company’s representatives would flee without making any payment,” he said.
Roslee said initial investigations found that the company neither had a licence issued by the Companies Commission of Malaysia nor from Bank Negara to conduct gold trading activities.
So far, he said police had arrested three suspects and were in the midst of tracking down 10 of their accomplices to facilitate further investigation into the case.
Meanwhile, Roslee said 32 people suffered losses totalling RM300,000 after they fell victim to a fraud scheme.
“Members of the syndicate posing as court, Customs or police officers, would call the victims and forge the identity of their mobile phone numbers using Voice-over-Internet Protocol (VoIP),” he said.
Roslee said the syndicate would then offer to help the victim settle their court or crime cases with certain fees to be banked in an account provided.
“So far, we cannot do anything about VoIP, but we do not dismiss the possibility that the syndicate involves an insider who provides information on the victims who are facing crime cases,” he said.
Roslee said further investigations were being done and several bank account holders had been arrested to facilitate the probe.
Hence, he said members of the public were advised to be wary of any investment offers and phone calls to prevent them from being cheated.
He said the public could also call the Penang Commercial Crime Investigation Department at (04) 222-1591 for enquiries concerning suspicious calls or investment opportunities. -- Bernama
Tuesday, February 9, 2010
Tuesday, January 26, 2010
Illegal deposit-taking
Seremban, MALAYSIA - A day after being charged with illegal deposit-taking activities involving over RM70mil, a 39-year-old company chief executive officer was charged with 31 counts of laundering RM23.3mil within 11 months.
Syed Shareezally Syed Aualadali claimed trial to all the charges which he allegedly committed when he was director of Eastana Farm Industries Sdn Bhd, a company involved in livestock farming and beef production.
Syed Shareezally allegedly received or transferred the money into individual and company accounts in Negri Sembilan, Selangor and Kuala Lumpur from Feb 6, 2008 to Jan 5, 2009.
The father of four was charged under Section 4(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act (AMLATFA) 2001. If convicted, he can be fined up to RM5mil or jailed up to five years or both.
Earlier, another director of the company A. Halim A. Rahman, also 39, was charged under the same Act for transferring RM2.97mil from Eastana Farm Industries’ account at EON Bank in Senawang into the account of Eastana Farm Management.
He allegedly committed the offence on July 25, last year. Halim also claimed trial.
On Monday, both men from Taman Lavender Heights near here claimed trial at the same court to accepting deposits from the public without a licence from Bank Negara between February and October 2008.
Deputy public prosecutor Mohamad Saifuddin Hashim Musaini asked for a RM1mil bail for Syed Shareezally and RM300,000 for Halim.
But their counsel Zorah Jan Mohd Newaz applied for a lower bail as they had both turned themselves in.
“The accused are unable to come up with such a big amount as their accounts have been frozen due to the allegations.
“Apart from having families to fend for, both paid RM300,000 each in bail for the illegal deposit-taking charges on Monday,” she said, adding that Syed Shareezally was also the sole breadwinner.
Zamri then set RM500,000 and RM250,000 as bail for Syed Shareezally and Halim respectively in one surety each. He also ordered them to surrender their passports to the court.
Both cases will be rementioned simultaneously on March 29.
Syed Shareezally Syed Aualadali claimed trial to all the charges which he allegedly committed when he was director of Eastana Farm Industries Sdn Bhd, a company involved in livestock farming and beef production.
Syed Shareezally allegedly received or transferred the money into individual and company accounts in Negri Sembilan, Selangor and Kuala Lumpur from Feb 6, 2008 to Jan 5, 2009.
The father of four was charged under Section 4(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act (AMLATFA) 2001. If convicted, he can be fined up to RM5mil or jailed up to five years or both.
Earlier, another director of the company A. Halim A. Rahman, also 39, was charged under the same Act for transferring RM2.97mil from Eastana Farm Industries’ account at EON Bank in Senawang into the account of Eastana Farm Management.
He allegedly committed the offence on July 25, last year. Halim also claimed trial.
On Monday, both men from Taman Lavender Heights near here claimed trial at the same court to accepting deposits from the public without a licence from Bank Negara between February and October 2008.
Deputy public prosecutor Mohamad Saifuddin Hashim Musaini asked for a RM1mil bail for Syed Shareezally and RM300,000 for Halim.
But their counsel Zorah Jan Mohd Newaz applied for a lower bail as they had both turned themselves in.
“The accused are unable to come up with such a big amount as their accounts have been frozen due to the allegations.
“Apart from having families to fend for, both paid RM300,000 each in bail for the illegal deposit-taking charges on Monday,” she said, adding that Syed Shareezally was also the sole breadwinner.
Zamri then set RM500,000 and RM250,000 as bail for Syed Shareezally and Halim respectively in one surety each. He also ordered them to surrender their passports to the court.
Both cases will be rementioned simultaneously on March 29.
Tuesday, December 1, 2009
Scott Rothstein charged in $1 billion Florida Ponzi scheme
A disbarred Florida lawyer surrendered to the FBI on Tuesday and pleaded not guilty to charges he ran a complex Ponzi scheme that bilked investors out of more than $1 billion.
Scott Rothstein, who fled to Morocco in late October but returned to Florida in early November, was denied bond during a brief appearance before a federal magistrate in Fort Lauderdale.
He was charged with racketeering conspiracy under a statute often used to prosecute organized crime chiefs and drug lords.
Rothstein, who was disbarred last week by the Florida Supreme Court, also was charged with mail, wire and bank fraud, and money laundering. He faces up to 20 years in prison on the racketeering charge and up to 100 years if convicted on all counts, plus forfeiture of tens of millions of dollars in illegal profits.
The FBI said that Rothstein, 47, had been selling shares in fabricated legal settlements to unsuspecting investors since at least 2005, using new investor money to pay previous investors in the classic Ponzi scheme model.
He claimed to have won lucrative awards in workplace discrimination and whistle-blower lawsuits, when no such settlements existed, federal investigators said.
Rothstein pleaded not guilty to all the charges. His lawyer, Marc Nurik, said after the hearing that Rothstein was "going to try to do the right thing" for his investors.
"My client wishes to see that legitimate investors get paid their money back," Nurik told journalists, without specifying how that might be done.
FBI and IRS agents raided Rothstein's Fort Lauderdale law office in November and seized his waterfront home, yacht and other properties in Florida, New York and Rhode Island.
Investors have already begun filing lawsuits saying they were cheated and should get a share of the assets. Lawyers for the alleged victims said the scheme was so massive and complex that Rothstein could not have acted alone.
The Miami Herald said federal prosecutors would ask a grand jury to consider criminal charges against his alleged co-conspirators, possibly including former employees of his now-defunct firm.
He was chief executive and managing partner in the firm of Rothstein Rosenfeldt Adler PA, which was placed in receivership in November.
Rothstein, a frequent campaign contributor who was often photographed with politicians, lived a lavish life with opulent homes and a fleet of foreign sports cars. He used his connections and charm to lure wealthy friends and patrons to invest with him.
Early on Tuesday morning, television cameras showed him being led into the FBI headquarters with his hands cuffed behind his back.
Related posts:
* Ponzi scammer dies in drive off cliff before sentencing
* The biggest Ponzi Scheme ever
Scott Rothstein, who fled to Morocco in late October but returned to Florida in early November, was denied bond during a brief appearance before a federal magistrate in Fort Lauderdale.
He was charged with racketeering conspiracy under a statute often used to prosecute organized crime chiefs and drug lords.
Rothstein, who was disbarred last week by the Florida Supreme Court, also was charged with mail, wire and bank fraud, and money laundering. He faces up to 20 years in prison on the racketeering charge and up to 100 years if convicted on all counts, plus forfeiture of tens of millions of dollars in illegal profits.
The FBI said that Rothstein, 47, had been selling shares in fabricated legal settlements to unsuspecting investors since at least 2005, using new investor money to pay previous investors in the classic Ponzi scheme model.
He claimed to have won lucrative awards in workplace discrimination and whistle-blower lawsuits, when no such settlements existed, federal investigators said.
Rothstein pleaded not guilty to all the charges. His lawyer, Marc Nurik, said after the hearing that Rothstein was "going to try to do the right thing" for his investors.
"My client wishes to see that legitimate investors get paid their money back," Nurik told journalists, without specifying how that might be done.
FBI and IRS agents raided Rothstein's Fort Lauderdale law office in November and seized his waterfront home, yacht and other properties in Florida, New York and Rhode Island.
Investors have already begun filing lawsuits saying they were cheated and should get a share of the assets. Lawyers for the alleged victims said the scheme was so massive and complex that Rothstein could not have acted alone.
The Miami Herald said federal prosecutors would ask a grand jury to consider criminal charges against his alleged co-conspirators, possibly including former employees of his now-defunct firm.
He was chief executive and managing partner in the firm of Rothstein Rosenfeldt Adler PA, which was placed in receivership in November.
Rothstein, a frequent campaign contributor who was often photographed with politicians, lived a lavish life with opulent homes and a fleet of foreign sports cars. He used his connections and charm to lure wealthy friends and patrons to invest with him.
Early on Tuesday morning, television cameras showed him being led into the FBI headquarters with his hands cuffed behind his back.
Related posts:
* Ponzi scammer dies in drive off cliff before sentencing
* The biggest Ponzi Scheme ever
New Zealand super-spammer fined $16m
A New Zealand man living in Queensland and believed to be behind the world's largest spam operation, has been ordered to pay more than $16 million for running the illegal enterprise. Lance Atkinson, 26, originally from Christchurch, was living in Pelican Waters on the Sunshine Coast when the US Federal Trade Commission (FTC) had his assets frozen last year.
He had previously admitted sending spam and was fined $100,000 by a New Zealand court, but the FTC saw that further punishment was due. Yesterday, the Commission fined him $16 million in a decision mirroring that of the Federal Court in Brisbane in October, which handed the same penalty to handed to two SMS spamming companies.
The FTC found Atkinson and American Jody Smith were at the centre of the world's largest internet spam operation, dubbed "AffKing", having recruited spammers from around the world.
They sent billions of emails directing recipients to websites advertising bogus male enhancement drugs and weight loss pills shipped from India, which they falsely claimed had come from a licensed pharmacy in the US.
Atkinson and Smith allegedly controlled a "botnet" of 35,000 computers, capable of sending 10 billion email messages a day.
Servers in China hosted the websites and the drugs were shipped from India, while operatives in Cyprus and the former Soviet republic of Georgia processed credit card information.
Three million complaints were lodged against the spammers in a six-month period against Atkinson's Australian-registered company, Inet Ventures, which was one of four companies peddling prescription drugs targeted by the FTC.
The non-profit antispam research group SpamHaus told Fairfax Media the network - which has ties to Australia, New Zealand, India, China and the United States - was the largest spam operation in the world and at one point was responsible for one-third of all spam.
Atkinson's brother Shane and another New Zealand man, Roland Smits, were also allegedly involved in the operation.
The original $100,000 fine related only to the two million emails the trio allegedly sent to New Zealand addresses, which netted them more than $US2 million in sales commissions.
He had previously admitted sending spam and was fined $100,000 by a New Zealand court, but the FTC saw that further punishment was due. Yesterday, the Commission fined him $16 million in a decision mirroring that of the Federal Court in Brisbane in October, which handed the same penalty to handed to two SMS spamming companies.
The FTC found Atkinson and American Jody Smith were at the centre of the world's largest internet spam operation, dubbed "AffKing", having recruited spammers from around the world.
They sent billions of emails directing recipients to websites advertising bogus male enhancement drugs and weight loss pills shipped from India, which they falsely claimed had come from a licensed pharmacy in the US.
Atkinson and Smith allegedly controlled a "botnet" of 35,000 computers, capable of sending 10 billion email messages a day.
Servers in China hosted the websites and the drugs were shipped from India, while operatives in Cyprus and the former Soviet republic of Georgia processed credit card information.
Three million complaints were lodged against the spammers in a six-month period against Atkinson's Australian-registered company, Inet Ventures, which was one of four companies peddling prescription drugs targeted by the FTC.
The non-profit antispam research group SpamHaus told Fairfax Media the network - which has ties to Australia, New Zealand, India, China and the United States - was the largest spam operation in the world and at one point was responsible for one-third of all spam.
Atkinson's brother Shane and another New Zealand man, Roland Smits, were also allegedly involved in the operation.
The original $100,000 fine related only to the two million emails the trio allegedly sent to New Zealand addresses, which netted them more than $US2 million in sales commissions.
Wednesday, November 25, 2009
Sydney man defraud $16 million from a fashion company
A man accused of defrauding a fashion company of more than $16 million is potentially facing more than 200 charges.
Police say the 42-year-old man, who lives in Turramurra on Sydney's north shore, submitted fake invoices to the company from other businesses for services and supplies he did not provide, between 2004 and April this year. Why the company Account Department could not spot his activities is not revealed.
He allegedly netted more than $16 million from the fraud.
The man was charged with 107 fraud offences yesterday.
He has been remanded in custody because he was unable to meet conditional bail requirements.
Police say they expect to lay an additional 119 charges against the man when he appears at Central Local Court today.
Police say the 42-year-old man, who lives in Turramurra on Sydney's north shore, submitted fake invoices to the company from other businesses for services and supplies he did not provide, between 2004 and April this year. Why the company Account Department could not spot his activities is not revealed.
He allegedly netted more than $16 million from the fraud.
The man was charged with 107 fraud offences yesterday.
He has been remanded in custody because he was unable to meet conditional bail requirements.
Police say they expect to lay an additional 119 charges against the man when he appears at Central Local Court today.
Tuesday, November 10, 2009
Watch out for Facebook Game Scams
Facebook games — Mafia Wars, FarmVille, Restaurant City — have become surprisingly effective at diverting time wasters among the social-networking crowd. More than 63 million people alone play FarmVille. But now accusations have surfaced that the games can lead some more gullible players, including children, into Internet scams, especially if they have a cell phone.
Here's how it works. You join FarmVille, a game on Facebook in which you can create a virtual farm by growing crops and livestock and tilling the earth. Through your toil, you earn virtual money, but to farm more efficiently or quickly, you can also invest real cash (through PayPal or a credit card) to buy virtual goods, such as seed or a tractor. Should you not have any real cash to spare on things that after all do not actually exist, you can instead accept an offer from one of the advertisers on the game site and get virtual cash in return.
These offers, generally known in the business as lead-gen (lead generators), will give you some seed/tractor money in return for signing up for, say, a subscription to Netflix or a credit card. But less scrupulous advertisers lure players in with an offer to take a bogus survey or IQ test. Once it's completed they require a cell-phone number to send you the results. When you enter your cell number and create a password, you have unwittingly subscribed to a service you never wanted but will be billed for. If you're a kid, the mysterious charge then appears on the phone bill of the parents, who often find that phone companies will not cancel services from a third-party provider — even if the parent cannot find out who that provider is.
Will O'Brien, general manager of social and casual games at TrialPay, a company that matches advertisers with potential online clients, told the San Francisco Chronicle that offers to swap personal information for virtual cash are designed to reach the young because they're less likely to have a credit card. But they often have cell phones, usually on their parents' plans. Indeed, while Facebook rules state that users must be at least 13, FarmVille seems to be aimed at a youthful crowd, at least by its marketing pitch: "Howdy Ya'll! Come on down to the Farm today and play with your friends ..."
The issue came to a head on Nov. 1 when the blogger Michael Arrington of Tech Crunch confronted some of the advertising providers at a virtual goods summit with accusations of scammy behavior. He blogged about it and also managed to find a former social-networking ad executive who admitted that the industry knew that not all the ads were on the up-and-up.
Mark Pincus of Zynga, the largest and most profitable of the social-networking game companies, (it created FarmVille, Mafia Wars and Cafe World) was quick to respond. "I agree with [Arrington] and others that some of these offers misrepresent and hurt our industry," he wrote on his blog. "We have worked hard to remove bad offers ... Nevertheless we need to be more aggressive and have revised our service-level agreements." He also took down all offers that involve sending a mobile-phone number. Offerpal, the biggest provider of offer advertising, also apparently responded quickly, replacing CEO Anu Shukla, shortly after a video of her confrontation with Arrington surfaced. Other game developers said the accusations amount to nothing more than the rants of an attention-hungry blogger.
According to the Better Business Bureau of Greater San Francisco, 222 complaints have been lodged against Zynga in the last 12 months. But most of these have not been about advertising scams, and Zynga has raised its BBB rating to a B+ from an F. Offerpal has a B rating. Industry figures suggest that roughly 90% of social-networking game players neither spend any real money nor click on any ads. And Facebook and MySpace say they monitor all applications closely and have suspended companies that violate its advertising protocols. In the last several days, both companies have revised their guidelines to be more stringent.
But clearly there's reason for caution. Other Internet entrepreneurs have piped up about the issue. James Hong, who co-founded Hotornot.com, said that even back in 2005 he'd stopped taking the kind of offers that ask for cell-phone numbers or a subscription. "The offers that monetize the best are the ones that scam/trick users," he wrote on his blog. "Sure we had [legitimate] Netflix ads show up ... but I'm pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff."
All in all, might be just as well to earn virtual cash the old-fashioned way: by playing for it.
Related posts:
* Woman falls for Facebook scam
Here's how it works. You join FarmVille, a game on Facebook in which you can create a virtual farm by growing crops and livestock and tilling the earth. Through your toil, you earn virtual money, but to farm more efficiently or quickly, you can also invest real cash (through PayPal or a credit card) to buy virtual goods, such as seed or a tractor. Should you not have any real cash to spare on things that after all do not actually exist, you can instead accept an offer from one of the advertisers on the game site and get virtual cash in return.
These offers, generally known in the business as lead-gen (lead generators), will give you some seed/tractor money in return for signing up for, say, a subscription to Netflix or a credit card. But less scrupulous advertisers lure players in with an offer to take a bogus survey or IQ test. Once it's completed they require a cell-phone number to send you the results. When you enter your cell number and create a password, you have unwittingly subscribed to a service you never wanted but will be billed for. If you're a kid, the mysterious charge then appears on the phone bill of the parents, who often find that phone companies will not cancel services from a third-party provider — even if the parent cannot find out who that provider is.
Will O'Brien, general manager of social and casual games at TrialPay, a company that matches advertisers with potential online clients, told the San Francisco Chronicle that offers to swap personal information for virtual cash are designed to reach the young because they're less likely to have a credit card. But they often have cell phones, usually on their parents' plans. Indeed, while Facebook rules state that users must be at least 13, FarmVille seems to be aimed at a youthful crowd, at least by its marketing pitch: "Howdy Ya'll! Come on down to the Farm today and play with your friends ..."
The issue came to a head on Nov. 1 when the blogger Michael Arrington of Tech Crunch confronted some of the advertising providers at a virtual goods summit with accusations of scammy behavior. He blogged about it and also managed to find a former social-networking ad executive who admitted that the industry knew that not all the ads were on the up-and-up.
Mark Pincus of Zynga, the largest and most profitable of the social-networking game companies, (it created FarmVille, Mafia Wars and Cafe World) was quick to respond. "I agree with [Arrington] and others that some of these offers misrepresent and hurt our industry," he wrote on his blog. "We have worked hard to remove bad offers ... Nevertheless we need to be more aggressive and have revised our service-level agreements." He also took down all offers that involve sending a mobile-phone number. Offerpal, the biggest provider of offer advertising, also apparently responded quickly, replacing CEO Anu Shukla, shortly after a video of her confrontation with Arrington surfaced. Other game developers said the accusations amount to nothing more than the rants of an attention-hungry blogger.
According to the Better Business Bureau of Greater San Francisco, 222 complaints have been lodged against Zynga in the last 12 months. But most of these have not been about advertising scams, and Zynga has raised its BBB rating to a B+ from an F. Offerpal has a B rating. Industry figures suggest that roughly 90% of social-networking game players neither spend any real money nor click on any ads. And Facebook and MySpace say they monitor all applications closely and have suspended companies that violate its advertising protocols. In the last several days, both companies have revised their guidelines to be more stringent.
But clearly there's reason for caution. Other Internet entrepreneurs have piped up about the issue. James Hong, who co-founded Hotornot.com, said that even back in 2005 he'd stopped taking the kind of offers that ask for cell-phone numbers or a subscription. "The offers that monetize the best are the ones that scam/trick users," he wrote on his blog. "Sure we had [legitimate] Netflix ads show up ... but I'm pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff."
All in all, might be just as well to earn virtual cash the old-fashioned way: by playing for it.
Related posts:
* Woman falls for Facebook scam
Sunday, November 8, 2009
Malaysian banks on alert for credit-card fraud
In the wake of reports on card merchants who double up as Ah Longs, banks are on the alert for any signs of credit-card fraud and misuse.
“It is compulsory for all merchant acquirers to update the merchant watchlist database on any negative or adverse information of their respective merchants that have been terminated due to any illegal and fraudulent activities,’’ said Lim Hong Tat, senior executive vice-president and head of consumer banking at Malayan Banking Bhd (Maybank).
“This information is available to all acquirers and can be used as a reference prior to recruiting merchants. Proper due diligence is also conducted,’’ Lim said.
In fact, there have been discussions on how to blacklist certain card merchants but problems arise when they switch banks and get signed up again.
“Rules governing the relationship between the merchants and acquiring banks can be found in the card associations’ operating regulations,’’ said Association of Banks in Malaysia executive director Chuah Mei Lin.
“Any breach of the terms and conditions by a merchant may result in the termination of services offered by the merchant’s bank, which is the bank that accepts payments for the products or services on behalf of a merchant,’’ she said.
However, Chuah said “the termination of services by a particular bank would still enable the merchant to apply to another bank for facilities.’’
“The only option in such instances would be for the complainant to lodge a complaint directly with Visa or MasterCard. and in the event of a serious breach, Visa or MasterCard may inform all banks of the breach and the merchant will be unable to establish new facilities with any other banks,’’ Chuah told StarBiz.
According to Renzo Viegas, head of retail banking at RHB Bank, new merchants are appraised with the same level of diligence used on prospective borrowers.
“Risks reviewed by banks include high chargebacks (relating to the rate and amount of disputed transactions ocurring at a merchant) on any prior records or existing relationships with banks, business failure or potential fraud,’’ Viegas said.
This appraisal involves a combination of any of the following: documentation on business registration, corporate resolution and other key business documents, assessment of any existing business relationship with the bank, review of the line of business and products offered by the merchant, analysis of projected sales volume, checking against risk databases of brands/card companies, and on-site inspection.
Merchant activities are regularly reviewed and those on possible high risk activities include analysis of chargeback trends, sales volume, ticket size relating to transaction amounts submitted by merchants for settlement, frequency and merchant settlements.
Rules laid down by brands and card companies such as Visa and MasterCard on data security standards, which provide a framework for safeguarding of credit-card data by merchants, must be adhered to.
“There are processes in place which audit the compliance of these standards by the affected merchants,’’ Viegas said.
EON Bank aimed to work with industry colleagues, Bank Negara, card associations and customers to stay ahead with the latest developments in the credit-card sector and strengthen measures to combat all such fraudulent activities, said Aaron Tan, head of cards and unsecured lending.
Besides monitoring all daily card transactions, from card acceptance to payments for both cardholders and merchants, EON Bank conducts rigorous screening of prospective merchants by scrutinising their background and track record as well as employing extensive risk scoring tools.
“EON Bank group also continuously fortifies its detection system, risk management and data security with the latest technology and best practices to safeguard the customers, merchants and the industry,’’ Tan said.
“It is compulsory for all merchant acquirers to update the merchant watchlist database on any negative or adverse information of their respective merchants that have been terminated due to any illegal and fraudulent activities,’’ said Lim Hong Tat, senior executive vice-president and head of consumer banking at Malayan Banking Bhd (Maybank).
“This information is available to all acquirers and can be used as a reference prior to recruiting merchants. Proper due diligence is also conducted,’’ Lim said.
In fact, there have been discussions on how to blacklist certain card merchants but problems arise when they switch banks and get signed up again.
“Rules governing the relationship between the merchants and acquiring banks can be found in the card associations’ operating regulations,’’ said Association of Banks in Malaysia executive director Chuah Mei Lin.
“Any breach of the terms and conditions by a merchant may result in the termination of services offered by the merchant’s bank, which is the bank that accepts payments for the products or services on behalf of a merchant,’’ she said.
However, Chuah said “the termination of services by a particular bank would still enable the merchant to apply to another bank for facilities.’’
“The only option in such instances would be for the complainant to lodge a complaint directly with Visa or MasterCard. and in the event of a serious breach, Visa or MasterCard may inform all banks of the breach and the merchant will be unable to establish new facilities with any other banks,’’ Chuah told StarBiz.
According to Renzo Viegas, head of retail banking at RHB Bank, new merchants are appraised with the same level of diligence used on prospective borrowers.
“Risks reviewed by banks include high chargebacks (relating to the rate and amount of disputed transactions ocurring at a merchant) on any prior records or existing relationships with banks, business failure or potential fraud,’’ Viegas said.
This appraisal involves a combination of any of the following: documentation on business registration, corporate resolution and other key business documents, assessment of any existing business relationship with the bank, review of the line of business and products offered by the merchant, analysis of projected sales volume, checking against risk databases of brands/card companies, and on-site inspection.
Merchant activities are regularly reviewed and those on possible high risk activities include analysis of chargeback trends, sales volume, ticket size relating to transaction amounts submitted by merchants for settlement, frequency and merchant settlements.
Rules laid down by brands and card companies such as Visa and MasterCard on data security standards, which provide a framework for safeguarding of credit-card data by merchants, must be adhered to.
“There are processes in place which audit the compliance of these standards by the affected merchants,’’ Viegas said.
EON Bank aimed to work with industry colleagues, Bank Negara, card associations and customers to stay ahead with the latest developments in the credit-card sector and strengthen measures to combat all such fraudulent activities, said Aaron Tan, head of cards and unsecured lending.
Besides monitoring all daily card transactions, from card acceptance to payments for both cardholders and merchants, EON Bank conducts rigorous screening of prospective merchants by scrutinising their background and track record as well as employing extensive risk scoring tools.
“EON Bank group also continuously fortifies its detection system, risk management and data security with the latest technology and best practices to safeguard the customers, merchants and the industry,’’ Tan said.
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