The Ministry of Digital Affairs yesterday posted a preview of revised guidelines authorizing third-party payment service providers to halt suspicious transactions and request an investigation.
The regulations were amended to cooperate with a crackdown on scammers by allaying industry fears that firms would breach contract obligations, the ministry said in a statement.
The notice was posted 30 days ahead of expected promulgation for public comment, as the law requires, it said.
Photo: Hsu Tzu-ling, Taipei Times
Service providers can detect suspicious transactions on their platform, but not act on that knowledge, as informing the authorities or delaying payment might constitute a breach of contract, it said.
Instead, service providers usually inform law enforcement about potentially fraudulent activities after completing the transaction, the ministry said.
The delays complicate criminal investigations and efforts to retrieve money that is defrauded, as the funds would have long since disappeared by the time a probe is launched, it said.
The updated rules would mandate service providers to keep records of transactions and empower them to call the police or share information about possible scams with others in the business, it said.
Vendors are permitted to suspend transactions and inform law enforcement officials if a client appears to be engaged in fraudulent activity or does not comply with identity authentication processes provided under know-your-client rules, the ministry said.
Under the proposed rules, vendors would be permitted to suspend a transaction for up to 30 days if they suspect fraudulent activities or have a client whose identity cannot be authenticated, it said.
The updated regulations stipulate stricter requirements for authenticating client identity and bookkeeping, the ministry said.
Third-party service providers would be obligated to preserve records of suspicious transactions for at least five years, although they have always been responsible for maintaining records, it said.
Failure to keep transaction records is a contravention punishable by a fine of NT$100,000 to NT$2 million (US$3,104 to US$62,073), or NT$500,000 to NT$10 million if the case is egregious, the ministry said.
The ministry disseminated the proposed guidelines among service providers before posting the notice and expects no major changes them, it said, adding that officials plan to promulgate the rules on Jan. 1 next year.
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