Taiwan's FSC Warns of Credit Card Fraud Via Digital Wallets

Taiwan's FSC (Financial Supervisory Commission) has reportedly directed the Taiwan Bankers Association to amend its guidance regarding mobile text notifications to ensure consumers are notified when their credit cards are being added to virtual wallets.

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Banks are currently required to send text messages to cardholders only when their credit cards are used to make purchases worth more than TWD 3,000. These notifications do not apply when credit cards are being added to digital wallets.

The directions to the Bankers Association come after a customer lost about TWD 190,000 (USD 6,400) as a result of a recent credit card scam involving virtual wallets, according to the FSC's Banking Bureau Deputy Director Phil Tong.

The customer had given his personal credit card information and OTP (one-time password) to a scammer who was posing as an admin of a local farmer's Facebook page. The scammer then used the information to add the customer's credit card to a digital wallet, and later made eight payments totalling TWD 190,000.

As the scammer did not make more payments for a short period, the bank failed to detect the fraud immediately, Tong said, adding that this is a new type of credit card scam.

According to local reports, cardholders from at least four local banks have reported losses worth a total of TWD 400,000 from similar fraudulent activity committed using their cards.

Tong also urged customers to remain vigilant about the text messages that notify them of a transaction of TWD 1, an amount that typically means a credit card is being added to a digital wallet.

The FSC added that digital wallets are third-party payment tools that often do not require user authentication for registration, making it possible for fraudsters to add another person's credit card to their own digital wallet.