Strengthen the Measures to Guard Against Fraudulent Activities

The Mandatory Provident Fund Schemes Authority, MPFA has issued a circular addressed at Mandatory Provident Fund (MPF) trustees to remind them of the crucial role they play in safeguarding the MPF system against fraudulent activities. In it, the MPFA emphasizes the evolving nature of fraud in the MPF system and the imperative for trustees to continually enhance their protective measures in relation to unauthorized actions concerning member requests related to MPF matters.
Specifically, MPF trustees are urged to adopt stringent internal controls and procedures in this context. This includes, for instance, prompt notification of members upon receiving transfer applications. Unlike the current practice where notifications are sent after the completion of transferring a member’s accrued benefits, the recommendation is to send alerts upon receiving transfer requests – prior to initiating any transfers. This allows members to verify the legitimacy of requests and enables trustees to take swift action in the case of unauthorized transfers. Additionally, trustees should directly follow up with scheme members, if suspicious information, such as questionable signatures or unauthorized changes in vital details, is identified in applications. Finally, the MPFA also recommends to regularly enhance and update any red flags in this context. The red flags could include receiving withdrawal requests in a short period from different members served by the same subsidiary intermediary or shortly after the completion of a transfer-in request.
The MPFA also deems collaboration with Principal Intermediaries (PIs) as essential for protecting the interests of scheme members. Trustees should work closely with PIs to monitor suspicious activities conducted by subsidiary intermediaries (SIs). This involves vigilance over abnormal increases in sales of MPF products by SIs and taking immediate action upon identifying any irregularities to protect scheme members‘ interests. Moreover, the MPFA recommends to enhance training for SIs in regulatory compliance and ethical behavior and to cover – at a minimum – updates on regulations, compliance requirements, and ethical standards pertaining to MPF products.
Finally, the MPFA notes that an integral aspect is educating scheme members to prevent scams and safeguard personal information. Trustees are encouraged to launch robust fraud prevention education programs through diverse channels, like their website, to raise awareness about recent scams and the significance of protecting personal details. Members are advised against disclosing personal information to unknown entities, signing incomplete forms, or trusting unfamiliar parties advising false statutory declarations or using forged documents to withdraw accrued benefits.