Section 424A Explained in Plain Language

What Is Section 424A?

Section 424A of the Penal Code makes it a crime to possess or control another person’s payment instrument or bank account without lawful authority. ^[f1] It came in through the Penal Code (Amendment) Act 2024. ^[f2]

The law is part of Malaysia’s response to the rise in mule accounts. It targets the receiving side: the person who holds, keeps or uses someone else’s account details.

What Counts as a Payment Instrument?

“Payment instrument” covers more than bank accounts. ^[f3] It includes debit cards, credit cards, e-wallets and any account that can receive, store or send money.

So holding someone else’s Touch ‘n Go eWallet login, GrabPay account or internet banking details all falls under Section 424A. The law treats a physical card and digital access the same way.

The Key Element: Without Lawful Authority

“Without lawful authority” is the central question in any Section 424A case. ^[f4] The prosecution must prove you had no legal right or genuine reason to hold the other person’s account.

Lawful authority can come from a few places. A valid power of attorney, a company authorisation to manage company accounts, or a joint account may each give you a legal basis. Your own facts decide whether your authority was lawful.

If you held someone’s account because they asked you to “keep it safe”, or because they paid you, that is unlikely to count as lawful authority.

Who Does Section 424A Target?

Section 424A focuses on the person who receives or holds someone else’s account details. ^[f5] In mule account investigations, this can be someone handed a bank card, a set of login details or access to another person’s e-wallet.

Common situations that lead to a Section 424A investigation:

• holding a friend’s ATM card “for safekeeping”
• being given someone else’s internet banking login
• using another person’s e-wallet to make payments

Students and young adults can be targeted. Offers of easy money to “borrow” an account or hold a card are one way mule account networks recruit.

The Penalty

The penalty under Section 424A is a fine of RM5,000 to RM50,000, six months to five years in prison, or both. ^[f1] Within that range, the court weighs how serious the case is, whether criminal money was involved and what your role was.

Section 424B, which covers handing over your own account, has a higher maximum penalty. Section 424C, which covers transactions without a lawful purpose, is heavier still, so 424A is the lightest of the three new offences.

What the Prosecution Does Not Have to Prove

Section 424A is described as holding or controlling another person’s account without lawful authority. Whether the account was actually used for crime is a separate point. What you knew and why you held the account matter to your defence.

Some people investigated under this section thought they were doing a favour or earning easy money. That is exactly the story to tell your lawyer in full.

How Section 424A Links to Account Freezes

If your bank account is frozen and the investigation involves Section 424A, the authorities suspect you of holding or controlling someone else’s payment instrument. The freeze keeps the evidence in place while they investigate.

Our guide to understanding account freezes explains how long a freeze lasts and your rights during the investigation. If you believe you had lawful authority, gathering your evidence early puts you in a stronger position.

What You Should Do

If you are under investigation, or the police have contacted you about holding someone else’s account, what you do now matters.

Do not delete any messages, documents or records about the account. They may contain evidence that helps you.

Do not contact the person who gave you the account to “get your stories straight”. This could be treated as interfering with a witness or obstructing the investigation.

Speak to a lawyer who handles mule account and frozen account cases. The answer depends on your facts: how you got the account, what authority you had and what happened to it. A lawyer can tell you whether “without lawful authority” really applies to you.

Sources

1. Penal Code (Amendment) Act 2024, Section 424A
2. Low & Partners, “Keldai Accounts: When Helping a Friend Becomes a Criminal Offence” (2024)
3. Raj, Ong & Yudistra, “Unveiling the Mystery: When Your Bank Account Gets Frozen by the Law” (2024)