Fraud and Scams Are Now a Threat to Financial Stability: Lessons from Thailand
By Kimmo Soramäki (Founder & CEO)
A recent episode in Thailand has drawn attention to a growing and complex challenge faced by financial authorities around the world: the rising threat of fraud and scams is no longer only a consumer protection issue, but it is increasingly becoming a question of financial stability.
In September, Thai authorities and banks initiated a large-scale crackdown on mule accounts—bank accounts used to receive or move the proceeds of scams. The campaign, part of an intensified anti-scam effort, involved freezing thousands of personal and small business bank accounts believed to be linked to fraudulent transfers across the nation's payment systems. However, the sweeping measures also captured many innocent account holders who appeared in transaction trails.
The Fallout: Public Backlash and Liquidity Concerns
The outcome was a public backlash and growing anxiety, prompting a surge in cash withdrawals and raising broader concerns about trust in the banking system. Reports indicate that, in some cases, banks also withdrew balances from the central bank as a precautionary step to preserve financial stability.
In response, the Bank of Thailand (BOT) and the Thai Bankers’ Association held urgent meetings and introduced new guidelines to mitigate the fallout. Under the revised protocol, banks must now unfreeze accounts found to be wrongly flagged within four hours to one business day, down from the previous standard of 3–7 days.
The Thai case highlights a policy dilemma faced by financial systems worldwide. On one hand, the need to act swiftly and effectively against scam networks is urgent, especially as digital payments grow in speed and scale. On the other hand, aggressive or poorly calibrated enforcement can produce unintended consequences, including damage to consumer trust, operational disruptions, and, if widespread, financial instability. In an extreme case, public confidence shocks could translate into a liquidity crisis if deposits are rapidly moved to other banks or withdrawn in cash.
Striking the Balance: The Role of a National Fraud Portal
This dilemma underscores why authorities must recognize the scam and fraud difference: while traditional fraud involves unauthorized access, modern scams involve authorized manipulation that tricks victims into moving money themselves. Catching these authorized but illicit flows requires far more sophisticated payment fraud detection than blunt account freezes.
Many countries are now resolving this tension by developing National Anti-Scam Utilities and shared National Fraud Portals. These dedicated digital platforms allow banks, payment systems, regulators, and law enforcement to collaborate in real time to counter financial crime. These platforms support structured fraud reporting, fund tracing across institutions, and risk-scored interventions based on clear and agreed principles.
When implemented with precision and powered by advanced financial network analytics, such systems can dramatically improve the recovery of stolen funds and increase the accuracy of mule detection, reducing false positives (where innocent accounts are frozen) that erode public confidence.
Precision, Security, and Fairness
However, even with advanced infrastructure, striking the right balance remains essential. Failing to detect real threats in time can allow criminals to escape with victims’ money and equally erode trust in digital payments and commerce. National systems must therefore be carefully designed to protect both objectives: security and fairness.
In today’s environment, where scams are often orchestrated across platforms and borders, the risk is no longer isolated to individuals. The erosion of public trust in the financial system can have cascading effects. The lesson is not one of blame, but of urgency: countries must act decisively to protect consumers and financial stability alike, while ensuring that the tools they deploy are accurate, transparent, and accountable.
