New Law Allows Immediate Freezing of Scam-Linked Accounts to Prevent Fraud

Bank accounts can now be immediately frozen without a court order if linked to scams, a measure designed to prevent further fraudulent transactions through those accounts, according to the police Anti-Scam Centre. This new authority is part of the fifth amendment to the Criminal Procedure Act, which came into effect on Monday.

Inspector Adam Naveed, head of the Anti-Scam Centre, explained to Mihaaru News that the amendment would significantly improve the fight against scams. One of the most crucial changes, he noted, is the creation of a real-time information-sharing system with financial institutions, overseen by the Maldives Monetary Authority (MMA). This system allows authorities to freeze accounts without needing court approval for up to 48 hours.

Naveed emphasized that this new power addresses a gap in the previous system where freezing an account required a court order. "Now, if we receive an urgent complaint, we can immediately freeze the account, and the law gives us the authority to freeze all related accounts for up to 48 hours," he said.

Previously, scam cases were handled by the local police station where they were reported. However, with the new amendment, all scam cases will now be managed by the Anti-Scam Centre. Victims can report scams through the 125 hotline. This shift, Naveed added, will prevent multiple individuals from being scammed through the same account.

The Anti-Scam Centre’s ability to collaborate with financial institutions means that once a scam is identified, accounts linked to fraudulent activity can be frozen immediately. Naveed also pointed out that, with decentralized transactions, it can be challenging to track if an account has been involved in multiple scams, which often makes investigations time-consuming.

While there’s a common belief that scams in the Maldives are mainly operated from prisons, Naveed clarified that this is not the case. Most scams are carried out by criminals both within the Maldives and abroad, with foreign scammers causing the most significant financial losses. For instance, just last Thursday, a company reported losing 250,000 Pounds in a scam.

The rise of scams has been linked to the country’s heavy reliance on imports, as local businesses often communicate with foreign suppliers via email. Scammers frequently gain access to email accounts and alter payment details, leading to funds being transferred to fraudulent accounts. In the latest case, the 250,000 Pounds loss was due to a compromised email account, according to the Anti-Scam Centre.