DuitNow Flagged: What to Do

What is DuitNow and how does flagging work?

DuitNow is Malaysia’s national real-time payment system, run by Payments Network Malaysia (PayNet). ^[f1] It lets you transfer money instantly between banks using a simple ID: your IC number, phone number or business registration number. Many banks and e-wallets use DuitNow for instant transfers.

A DuitNow flag is not the same as a bank account freeze. When your DuitNow ID is flagged, PayNet marks it across the whole network. So the block can hit your DuitNow transfers at every bank where that ID is linked, not just one account.

A flag can start with the National Scam Response Centre (NSRC) 997 hotline. ^[f2] When a scam victim calls 997, NSRC traces the money and flags accounts along the way. Your bank’s checks or PayNet’s monitoring can also lead to a flag. Bank Negara Malaysia (BNM) regulates payment systems such as DuitNow. ^[f3]

How do you find out your DuitNow is flagged?

The usual sign is a failed transfer. You try to send or receive money by DuitNow and it is rejected, often with an error message that explains nothing. Sometimes you only find out when someone says they cannot send you money.

A DuitNow flag blocks DuitNow transfers, but it does not always lock your bank account. You may still be able to withdraw cash, pay by debit card, or use other transfers such as IBG or RENTAS.

But a flag can lead your bank to review your account, and the bank may add its own restriction. That is why you need to know whether you are facing a DuitNow flag, a bank freeze, or both.

Why does DuitNow get flagged?

A common cause is an NSRC 997 report, after which NSRC traces where the scam money went. If it passed through your account on the way to the scammer, your DuitNow ID is flagged as part of that trace. ^[f2] You do not have to be the scammer for this to happen.

Other causes include unusual activity picked up by PayNet’s monitoring, or a report from your bank to PayNet. ^[f3] Lending your account to someone, accepting money from a stranger, or receiving an unusually large payment can all lead to a flag.

Under Penal Code Section 424A, possessing or controlling another person’s account or payment instrument without lawful reason is a crime, with a fine of RM5,000 to RM50,000, or 6 months to 5 years in prison, or both. ^[f5] Even if you had no idea the money came from a scam, the flag stays until the investigation clears your account.

How is a DuitNow flag different from a bank freeze?

They are two separate restrictions that can happen alone or together. A DuitNow flag comes through PayNet and affects the DuitNow network. A bank freeze comes from the police (CPC Section 116D), the Public Prosecutor (AMLA Section 50(1)) or the bank’s own compliance team. ^[f4]

A DuitNow flag may make your bank review and freeze your account, and a police freeze on your account may lead to a flag on your DuitNow ID. Sometimes both happen at once when NSRC handles a scam report. ^[f2]

Ask your bank whether the account itself is frozen or only your DuitNow transfers. If the account is frozen, ask who ordered it. If only DuitNow is affected, the way to fix it is different.

What should you do right now?

Call your bank and ask two separate questions: is your DuitNow ID flagged, and does your account have its own freeze or restriction? Write down the officer’s name and the reference number.

Check whether your DuitNow ID is linked to accounts at other banks. If your IC or phone number is your DuitNow ID, the flag may block transfers at all of them. Contact each bank to see how you are affected.

Gather your transaction records for the period before the flag. Focus on money coming in, especially from people you barely know or amounts unusual for your account. Your bank, the police and your lawyer will all need these.

Do not deregister or change your DuitNow ID. It does not remove the flag and may look like you are trying to dodge the restriction. Leave everything as it is while the matter is sorted out.

What are your rights?

You can ask why your DuitNow ID was flagged. If the flag came from an NSRC report, the police handling the case should be able to explain it. If it came from your bank’s review, the bank should tell you what caused it.

You can take legal advice before giving a statement. If you are arrested, you have the right to consult a lawyer before questioning. A lawyer can advise you before you explain your transactions to the police.

If an AMLA freeze order has been made on your account as well as the DuitNow flag, that order must be in writing. ^[f4] If the police froze your account under CPC Section 116D, it must be a written order from an officer of Sergeant rank or above.

If neither applies and no one can clearly explain the restriction, you may have grounds to challenge it.

How is a DuitNow flag lifted?

It depends on where the flag came from. A flag from an NSRC 997 report may be lifted once the police investigation ends and your account is cleared. ^[f2] If it came from your bank’s review, giving the bank documents that explain the flagged transfers can speed things up.

A lawyer can write to your bank, PayNet and the investigating authority to ask for a status update and push for a decision. A lawyer’s formal letter sets out your request clearly.

Read about the NSRC 997 reporting process to see how scam reports move through the system. Our guide to the different types of account freezes helps you work out exactly which restriction you have.

When do you need a lawyer?

If your DuitNow flag is linked to a police investigation or an AMLA order, you should get a lawyer. A lawyer can deal with the investigating authority, advise you before any interview, and, for a restriction that is unlawful or goes too far, apply to vary or lift it: to the Sessions Court for a police s116D freeze, or in writing to the authority that ordered an AMLA freeze (s44A for an agency s44 freeze).

Even when the flag is only a bank compliance matter, a lawyer who handles frozen account cases knows how to deal with PayNet and the banks. Several bodies are involved, and knowing whom to approach saves time.

The sooner you get advice, the sooner you can limit the damage to your finances. A clear plan backed by the right documents is the best way to ask for your DuitNow to be restored.

Sources

1. Payments Network Malaysia (PayNet), DuitNow national payment platform
2. National Scam Response Centre (NSRC), 997 hotline and scam reporting procedures
3. Bank Negara Malaysia, payment systems regulation under FSA 2013
4. Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), Section 50(1)
5. Penal Code, Section 424A, offences related to bank accounts used for unlawful proceeds