Recently, to prevent fraud and illegal accounts, many banks have been freezing accounts with “long periods of inactivity” and “low balances.” This has sparked public outrage and even led to websites being heavily attacked by anonymous netizens, who complained about the inconvenience of having to visit a bank counter to “unlock” accounts.
In fact, identifying abnormal accounts is a core component of the government’s anti-fraud efforts. According to statistics from the Banking Bureau of the Financial Supervisory Commission, the number of warning accounts in Taiwan reached 15,000 in 2016. By the second quarter of this year, the number of alert accounts had surged to 153,744, a tenfold increase over ten years. This is one of the factors contributing to the continued rise in fraud cases. We must support financial regulators and banks in strengthening their oversight measures. According to the 165 Anti-Fraud Dashboard, from August last year to July this year, a total of 184,983 fraud cases were filed, totaling NT$119,481,047,000. Faced with the constant escalation of fraud tactics, government departments are struggling, and banks face a dilemma in combating fraud. Customer losses continue to rise, while fraud prevention efforts are generating complaints and placing heavy pressure on frontline bank staff and law enforcement officers.
The investment of criminal gangs in financial crime has grown tenfold. Based on the public interest of preventing and controlling the harm of financial crime, we should fully support financial regulation that targets crime at its source. Every small step in supporting banks is a major step forward in strengthening overall financial defenses!
In fact, bank oversight systems are constantly being strengthened worldwide. Many overseas Chinese and international students encounter similar situations when opening accounts or transferring funds overseas, often jokingly saying, “Waiting for two or three hours in the US time” at the bank. Overseas accounts left unused for years can be locked, with all deposits deducted. In addition, they may be subject to custody fees and even pending penalties. Regarding electronic transfers, many countries will show the first transfer to a bank other than their own. While the funds will appear in the “PENDING” column, the remark will appear, requiring two business days of confirmation before withdrawals can be made. This is the “+2” program offered by some banks in Taiwan. Because interbank electronic transactions can be difficult to confirm immediately with the other bank, a two-business-day cooling-off period is provided to customers making transfers.
This period may be longer during consecutive holidays. However, to comply with anti-money laundering and anti-fraud policies, the public understands that these measures are necessary.
Regarding Japan’s Financial Supervision Commission, the Ministry of Finance’s Foreign Exchange and Foreign Trade Act requires banks to confirm that transactions with non-resident customers are not regulated. When a customer transfers funds, the bank will temporarily hold the funds and require additional confirmation from the sender or recipient. Therefore, non-resident transfers are subject to higher regulatory requirements. Furthermore, banks generally do not readily accept the opening of more than two accounts. Japan Post Bank even restricts non-resident customers from processing transfers at ATMs. Transfers must be processed in person at an international remittance counter or through a special app. Non-residents are also prohibited from using cash for wire transfers to prevent dummy accounts and money laundering.
To prevent fraud and safeguard public accounts, financial institutions and banks in Taiwan require regular customer identity verification. Many financial institutions have implemented controls on accounts with low balances and long periods of inactivity. This not only aligns with global financial regulatory trends but is also crucial to combating fraud. Without dummy accounts, fraudulent funds are difficult to launder. Consequently, fraud syndicates are currently launching troll attacks to create pressure on financial institutions. However, a sound financial regulatory system and a healthy understanding of financial accounts among the public must be rebuilt to eliminate high-risk accounts, re-verify abnormal accounts, and protect high-risk victim accounts.
While this will increase bank costs and customer complaints, and inconvenience customers, it is a necessary and in-depth initiative for the security of the financial system and a global trend in financial regulation. We must not allow trolls to influence us and abandon sound financial regulatory systems. For banks that have recently come under fire for actively cleaning up their accounts, we should all be grateful for their dedication and support.
(The author is an assistant professor in the Department of Criminal Justice at Ming Chuan University)