SFC Issues Guidance for Licensed Brokers to Prevent Clients from Rising SMS Phishing Scams

The Securities and Futures Commission (SFC) of Hong Kong has issued guidance to licensed corporations (LCs) aimed at preventing unauthorized trading in clients’ accounts, following a recent increase in fraudulent attacks via hyperlinks in phishing mobile text messages, commonly known as SMS phishing.

In late May, the SFC issued a public alert on fraudulent text messages impersonating licensed brokers. The regulator suspects fraudsters trick clients into clicking embedded hyperlinks that redirect them to fake websites resembling legitimate LCs. Once clients input their credentials, their usernames, passwords, and authentication data are intercepted, giving scammers access to their accounts for unauthorized trades.

According to the SFC, several recent cases of unauthorized trading have resulted in financial losses for unsuspecting LC clients.

In its latest circular, the SFC urges LCs to implement protective measures, including:

• Help their clients to verify the identity of text message senders and to prevent impersonation by fraudsters by signing up for the free SMS Sender Registration Scheme;
• Implement an effective monitoring and surveillance mechanism to detect unauthorised access to its clients’ accounts, and report suspicious transactions promptly to the Joint Financial Intelligence Unit so that timely follow-up actions can be taken;
• Raise clients’ awareness by stepping up client outreach and engagement efforts, particularly if the LC has encountered unauthorised trading incidents or is on notice that such incidents are occurring within the industry. 

The SFC reminds investors to remain vigilant when receiving text messages purportedly from LCs. Individuals should avoid clicking embedded links and verify any communication directly with their financial services providers.

Investors are strongly advised not to disclose their account login details to unverified websites, even if they appear genuine. If you suspect a website is fraudulent or have fallen victim to a financial scam, you can Submit a Complaint to BrokersView.