Business
WeChat Pay Hong Kong Slapped with HK$875,000 Fine by HKMA Over Failure in Customer Due Diligence
The Hong Kong Monetary Authority (HKMA) imposed a fine of HK$875,000 on Tencent's WeChat Pay Hong Kong due to negligence in their due diligence practices. The HKMA's probe spanned five years, ending in October 2021, throughout which WeChat Pay did not put in place sufficient safeguards and checks.
On Friday, the Hong Kong Monetary Authority (HKMA) announced it has levied a penalty of HK$875,000 (US$112,205) on Tencent Holdings' local subsidiary, WeChat Pay Hong Kong. The fine was due to the company's shortcomings in carrying out customer due diligence protocols.
The Hong Kong Monetary Authority (HKMA) enforced disciplinary measures on WeChat Pay after conducting an inquiry that spanned over five years, from August 2016 to October 2021. During this time, the service provider didn't establish sufficient and suitable controls for customer due diligence.
The shortcomings were primarily focused on the regulations concerning anti-money-laundering and preventing the funding of terrorism through stored value facilities, as per a declaration from the HKMA.
The Hong Kong Monetary Authority (HKMA) stated that WeChat Pay failed to evaluate the potential dangers after receiving a warning from legal authorities to investigate mobile numbers implicated in possible frauds and verify if these numbers were associated with its clients.
The organization received data relating to 1,827 instances from 500 accounts. From this, 98 were linked to 84 clients who were later reported to the Joint Financial Intelligence Unit (JFIU) of the Hong Kong government.
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