Mrs Wipharat Khun-at, 28, owner of a durian shop in Khon Kaen, and a friend describe the devastating impact of this month’s online crackdown. 160,000 baht was frozen from their account, and seven days later the money was still frozen. Meanwhile, the Kla Tham Party MP for Chonburi warns that he is inundated with complaints from small business owners and traders outraged by frozen bank accounts and confiscated funds. (Source: Khaosod)
In Thailand, a massive problem of trust is currently erupting in digital banking. What was originally introduced as a resolute measure against online fraud is increasingly turning into a storm of public outrage. More and more citizens feel that they have been unfairly victimised and robbed of their economic foundation.
Restaurant, wholesale and retail associations have expressed concern about offering customers wire transfer or QR payment options, fearing their accounts could be frozen while authorities deal with the mule account issue.
An instrument against fraud – with collateral damage
The government has given banks and authorities the power to pre-emptively freeze accounts if fraudulent activity is suspected. In practice, this means that thousands of accounts are blocked – often without definitive proof. Small business owners, traders and ordinary employees suddenly find themselves without access to their earnings. One durian seller, for example, reported that over 160,000 baht had been frozen – a week later the money had still not been released.
The authorities are trying to appease the public. According to their own statements, only a few per cent of cases are genuine mistakes, the rest are based on real suspicions. But this information hardly reassures anyone: the only thing that matters to those affected is that their everyday life has suddenly come to a standstill.
Loss of confidence and return to cash
One particularly explosive consequence is that more and more citizens are starting to withdraw their money en masse from their bank accounts. For fear of suddenly being blocked, the use of cash is growing again – a step backwards for a country that actually wanted to digitalise. Merchants are avoiding digital payments and customers are withdrawing cash reserves. This behaviour undermines the government’s modernisation goals and weakens the banks, which are already facing growing scepticism.
The risk: If large sections of the population lose their trust in digital transactions, economic instability and social tensions can escalate rapidly. In some regions, there are already reports of growing unrest and chaotic scenes in front of ATMs.
State arbitrariness or necessary security?
The core problem lies in the lack of transparency. The criteria for “suspicious activity” remain vague, and the processes for authorisation are complex and slow. Citizens have to submit forms, submit police reports and often wait for days before they can access their own funds again. For many, this seems less like protection against criminals and more like state arbitrariness.
Critics warn that a system that blocks honest people without warning undermines trust more than it creates security in the long term. Parties such as Kla Tham have long been calling for changes, and the pressure is also increasing in parliament.
What needs to happen now
What is needed are quick procedures that provide clarity within 24 hours. In addition, only suspicious amounts should be blocked, not entire accounts. Ombudsman offices or independent control mechanisms could ensure that errors do not end in bureaucratic dead ends.
Because if trust in the banks continues to erode, there is a threat of more than just a technical problem. It could jeopardise social stability itself.
