In order to strengthen fraud prevention measures across financial, telecommunications, and internet sectors; to minimize the misuse of these systems for fraudulent activities; to impose penalties on fraud rings; and to safeguard the rights of victims, the Legislative Yuan enacted the Fraud Crime Hazard Prevention Act (hereinafter “this Act”), which was promulgated by the President on July 31. However, Articles 19, 20, 22, and 24 are set to take effect on November 30, 2024, while the effective dates for Article 39, Paragraphs 2 to 5—pertaining to traffic management measures, DNS RPZ measures, and access restriction—and Article 40, Paragraph 1, Subparagraph 6 remain subject to further announcement by the Executive Yuan.
The scope of fraud crimes under this Act includes not only the aggravated fraud offense under Article 339-4 of the Criminal Code, but also encompasses other offenses that, according to judicial rulings, are considered to be committed in conjunction with fraud (Article 2, Subparagraph 1 of this Act). This Act simultaneously imposes strengthened obligations of action and due care on entities such as financial institutions, virtual asset service providers, telecommunications service providers, online advertising platforms, third-party payment service providers, e-commerce platforms, and online gaming operators to prevent fraudulent activities (Articles 7, 8, 14, 30, 34, and 36 of this Act). Furthermore, when such businesses or personnel implement anti-fraud measures in accordance with this Act, they are exempt from confidentiality obligations and related liabilities for damages (Articles 12, 14, and 38). Nevertheless, where an online advertising platform becomes aware that an advertisement it publishes or promotes constitutes a fraudulent advertisement or clearly involves fraud but fails to take necessary remedial actions, it shall bear joint and several liability for damages suffered by individuals who trusted the advertisement, together with the party commissioning or funding the advertisement (Article 32).
On the other hand, this Act stipulates heavier penalties for aggravated fraud offenses involving illegal gains of NT$5 million or NT$100 million (Article 43). It also introduces criminal fines for legal entities involved in fraud-related offenses (Article 45). To facilitate restitution for victims and incentivize perpetrators to disclose upstream actors, the Act also provides commutation or exemption clauses under certain conditions (Articles 46 and 47). Additionally, victims who file civil lawsuits seeking compensation for losses arising from fraud are temporarily exempt from paying litigation and enforcement fees (Article 54).(This article was authored by Attorney Lin Tzu-Yu of ToMoDaChi Attorneys-At-Law.)
