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HKMA warns banks on malpractice by intermediaries and sales agents

Nurdianah Md Nur | Aug. 13, 2015
Banks are to cease using referral services by intermediaries, and strengthen control measures to safeguard their customer data.

The Hong Kong Monetary Authority (HKMA) has issued a circular to banks, requiring them to enhance customer protection and mitigate reputational risks arising from malpractices of intermediaries or sales agents.

According to the guidance, banks should cease using referral services offered by intermediaries for the purpose of sourcing retail consumer financial products or services such as personal loans and credit cards.

Banks should also critically review the control measures in place to ensure customer data are properly safeguarded during the product selling process by the sales agent and bank staff. The review report is required to be submitted to the HKMA within four months.

"Marketing of bank products and services will now only be conducted by bank staff or sales agents engaged and duly authorised by banks," said Arthur Yuen, Deputy Chief Executive of the HKMA.

"If there are intermediaries claiming to be associated with banks and able to provide referral services in respect of retail consumer finance products or services by charging a handling fee or other fees, the public should be aware that such arrangements are not authorised by banks and may involve fraudulent acts. The public should be alert to the associated risks and should not provide any sensitive personal information to such intermediaries. In case of doubt, they should contact the banks concerned directly or report to the police," he added.


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