Public outrage erupts in Thailand as authorities’ crackdown on online fraud freezes thousands of bank accounts, crippling small businesses, daily traders, and merchants, while officials scramble urgently to restore access and rebuild public trust in the system.
Public outrage is mounting over a police and security crackdown on illicit online fraud proceeds. On Monday, reports surfaced of a surge in cash withdrawals in Chanthaburi province, while businesses are openly challenging the government’s narrative. The controversy has drawn sharp criticism from the Kla Tham Party, the nation’s second-largest party in the ruling coalition. A Chonburi MP warned of widespread alarm after receiving calls from enraged constituents. Meanwhile, the Digital Economy and Society Ministry admitted that of 1,300 complaints in a single day, only 30—or 2.3%—involved genuine victims of mistakes. Officials are clearly seeking to rally public support for the government’s new powers aimed at hitting online scammers and fraudsters, but the growing backlash suggests the strategy may be backfiring or perhaps needs re-thinking.
A major financial crisis emerged in Thailand as authorities pursued online fraud and mule accounts. On Monday evening and Tuesday morning, two conflicting narratives emerged. The Digital Economy and Society Ministry emphasised that only a small fraction of reported cases involved genuine mistakes. Specifically, it stated that scarcely 2.3%, or roughly 30 of the 1,300 complaints received in one day, were legitimate.
However, officials simultaneously insisted that only accounts connected to criminality were being frozen. Nevertheless, confusion spread as many account holders reported full freezes. Consequently, public frustration escalated, particularly among small businesses and daily merchants.
Frustration as cumbersome account procedures leave small businesses struggling to regain access to funds
Many business owners expressed outrage over the cumbersome processes required to regain access to frozen accounts. Initially, the process involves submitting formal police statements. For instance, one businessperson provided a 20-kilogram suitcase of records to authorities and reported that it took four days to unfreeze the account.
Moreover, reports indicate that investigators now possess sweeping powers under the new Royal Decree to flag and freeze bank accounts preemptively. This legal framework, while intended to curb fraud, has also affected innocent bank users.
The crisis prompted businesses to publicly reveal their cases. A Khon Kaen durian shop had ฿160,000 frozen in its account. Bank officials initially promised to release the funds within four days. Yet, by Monday, seven days later, the freeze had not been lifted. Consequently, operations were disrupted, resulting in decreased product supply and revenue loss.
Political actors quickly reacted. The Kla Tham Party criticised the account freezes and demanded urgent intervention. Chonburi MP Mr. Sathira Phuekpraphan received numerous complaints and called for immediate corrective measures.
ATM withdrawals surge and public unrest escalates as citizens lose confidence in digital banking
Additionally, reports from Chanthaburi province indicated a rise in ATM withdrawals as citizens lose confidence in digital banking. Consequently, the public dispute over the banking debacle is intensifying.
Police and security agencies, in collaboration with commercial banks, are using powers granted by the Royal Decree to freeze accounts quickly. They argue these measures are necessary to prevent fraud. Furthermore, the Computer Crime Act of 2007, as updated in 2017, provides additional legal authority. Nonetheless, innocent account holders are often caught in the process.
According to Mr. Sathira, online merchants, street vendors, and flea market operators face severe financial hardship. Their daily operations depend on accessible funds. He stated that the freezes constitute a public health issue, not just a technical problem.
Consequently, the BoT’s actions, though well-intentioned, have eroded trust in the banking system. Citizens increasingly rely on cash to mitigate risks, disrupting digital payments and the broader economy.
Mr Sathira proposes urgent measures to speed up account unlocking and limit disruption to banking
Mr. Sathira proposed several urgent measures to address the crisis. Firstly, he suggested a 24-hour express account unlocking centre for verified account holders. This would allow citizens to regain access to frozen accounts within a single day, instead of waiting multiple days.
Secondly, he recommended shortening the average release time from three days to less than one day. Thirdly, he urged the BoT and the Thai Bankers’ Association to improve classification systems for high-risk accounts based on transaction behaviour and account holder qualifications.
Moreover, he proposed limiting transactions for flagged accounts to reduce disruption. Suspicious amounts should be frozen individually rather than suspending entire accounts. For example, if a transfer of ฿100 triggers a freeze, only ฿100 should be blocked, not the full account balance.
Additionally, Mr. Sathira advocated developing an AI-based Know Your Transaction (KYT) system. This system would monitor suspicious activity in real time and reduce errors caused by incorrect suspensions.
One-stop appeal service and legal accountability proposed to protect citizens and restore trust in banking
A one-stop service for citizens to appeal freezes was also recommended. Account holders should receive a response within 24 hours. Under the Citizens’ Rights Protection Act, banks must be held liable for damages caused by improper account freezes or investigations. Proactive public communication is critical to restore trust and awareness of rights.
The plight of Khon Kaen’s durian shop exemplifies the human cost of delayed releases. Owner Ms. Wipharat Khun-at had a bank account with ฿160,000 frozen. Only ฿16,000 had been transferred from a mule account, yet the entire account was blocked. Initially, she was told the freeze would last three days.
However, after seven days, her account remained inaccessible. This situation prevented her from purchasing sufficient durian, reduced retail and wholesale sales, and caused severe operational stress.
Ms. Wipharat took to social media to highlight her experience. She explained that small businesses cannot control the origins of customer funds. Consequently, her account, containing legitimate earnings, was frozen.
Delayed responses from banks and cyber police highlight inefficiencies as social media amplifies disruptions
She contacted both the bank and the cyber police, but responses were delayed, and timelines were unclear. Social media amplified the case, with other account holders reporting similar disruptions.
The Bank of Thailand responded by announcing accelerated efforts to unlock frozen accounts. Under new procedures, banks can release transactions within one day or as quickly as three to four hours. Previously, verification could take three to seven days.
Ms. Daranee Saeju, assistant governor for the Payment System Policy and Financial Protection Group, emphasised that the system now distinguishes between mule accounts and legitimate accounts more accurately.
The initiative involves the BoT, Digital Economy and Society Ministry, Anti-Money Laundering Office, Thai Bankers’ Association, and the Cyber Crime Investigation Bureau. A joint “war room” examines each case in detail, separating innocent account holders from financial scammers.
Investigations have expanded to cover e-money and digital assets. Since August, regulators have intensified scrutiny, resulting in more flagged accounts. Between August 17-23, around 14,000 accounts were suspended weekly. This number fell to 10,000 between September 7-11. Although regulations target mule activity, they also affect innocent users.
Authorities aim to separate scammers from legitimate users while investigative inefficiencies stoke tensions
Ms. Daranee stated that the authorities are working to ensure scammers are caught while allowing legitimate customers to transact confidently. Innocent account holders can verify their identity via the 1441 hotline. Banks process verifications three times daily. Central bank monitoring has detected no irregularities in withdrawals, and sector liquidity remains stable.
Meanwhile, investigative inefficiencies have become evident. A Facebook post from the page “Female Investigator” described sloppy procedures for freezing accounts. Investigators often operate under extreme stress, using personal phones and resources to handle cases.
They rarely receive overtime pay and are required to photocopy records for verification. Officers cannot unfreeze accounts, leaving many citizens impacted for days.
The Technology Crime Suppression Division distributes cases among police stations. Officers often work extended hours with no formal shift structure. Thousands of account holders remain affected, and complaints are difficult to track systematically. The current system places enormous stress on personnel and delays account resolution.
Prolonged freezes disrupt commerce and payments, highlighting the need for technology reforms
The economic implications are significant. When citizens cannot access their funds, daily commerce slows, and digital payments are disrupted. Analysts warn that prolonged freezes could undermine public confidence and economic stability. Failure to control money flow risks stagnation and potential capital flight.
Regulators have responded by improving technological solutions. AI-driven monitoring, big data analytics, and KYT systems aim to identify suspicious transactions accurately. Banks are instructed to focus on flagged amounts rather than entire accounts. Additionally, express unlocking services and centralised appeal processes are being implemented.
Despite improvements, the crisis highlights structural weaknesses. Overreliance on manual verification, inadequate staffing, and reactive procedures has exacerbated the public’s frustration. Long-term reforms, including automated monitoring, regulatory oversight, and transparent communication, are essential. Small vendors and online merchants remain particularly vulnerable.
Political actors continue pressing for accountability. The Kla Tham Party and MP Sathira Phuekpraphan advocate for proactive measures, including precise account classification, transaction limits, selective freezing, and fast verification. Public education about rights and procedures is also a key recommendation.
Verified account holders regain access more quickly as authorities refine procedures and monitor liquidity
As of mid-September, regulators report a decline in suspended accounts. Verified account holders can now regain access more quickly. Verification processes occur multiple times daily. Agencies are coordinating to separate fraudulent activity from innocent transactions. Officials remain confident in banking sector liquidity and the safety of public deposits.
The crisis demonstrates the importance of accurate targeting and timely communication in digital banking. Authorities have made progress, but continued vigilance and process refinement are required. The experiences of small merchants, like Khon Kaen’s durian shop, underline the human and economic costs of slow account resolution.
Financial system chaos for traders and honest people as top security agencies pursue new banking powers
Banking crisis as security overreach limits large numbers of personal and business bank accounts
Thailand’s banking system is navigating a complex challenge: balancing fraud prevention with protecting ordinary citizens. Collaboration between regulators, law enforcement, and banks shows a commitment to reform. Technological upgrades, expedited verification, and transparent communication are essential to mitigating the crisis and restoring confidence.
The government emphasises that fraud must be addressed without harming legitimate account holders. AI monitoring, precise freezing, and rapid appeals are central to this strategy. Meanwhile, public education and proactive communication aim to reassure citizens and preserve trust in digital financial services. The crisis serves as a stark reminder that rapid modernisation of banking systems requires both technical precision and acute sensitivity to public impact.
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