There’s been a rise in online scams lately, with numerous unsuspecting people losing tens or even hundreds of thousands of dollars to criminals and their unscrupulous tricks.
On Monday (18 Sep), Workers’ Party (WP) MP Sylvia Lim urged banks to reimburse such scam victims.
She stated that it is “inadequate and unjust” for them to bear the losses that result from such incidents.
In response, Minister of State for Trade and Industry Alvin Tan said this could lull users into complacency.
Speaking in Parliament on 18 Sep, Ms Lim said financial scams have become a “major issue”, increasing by 25% year-on-year and going unreported.
With sophisticated methods, they have tricked even tech-savvy young adults.
Source: MCI Singapore on YouTube
Ms Lim also stated that the human suffering these scams cause is often devastating, especially for families and the vulnerable.
She went on to point out that the Monetary Authority of Singapore (MAS) has said it expects banks to treat customers fairly when it comes to scams.
Questioning these expectations, she then asked how MAS exercises its supervision in such cases.
The MAS had previously stated bank customers have the responsibility of taking necessary precautions, Ms Lim said.
If they have fallen short of this, they are expected to proportionally bear the loss.
Source: MCI Singapore on YouTube
This is “inadequate and unjust”, Ms Lim said, as customers are not sufficiently equipped to combat scams.
Criminals could obtain their bank login details by tricking them into clicking malicious links.
Adding that education and outreach efforts are insufficient, Ms Lim said:
Even the most technologically savvy person could easily make this mistake and, within a day, have their life savings wiped out.
Secondly, processes of deciding goodwill payments for customers could take time, most cases spanning six months.
This is not ideal for families who have lost their life savings and vulnerable victims who would also have to confront banks, she added.
Ms Lim also noted that banks, with the best position and resources to combat scams, should take an outsized role in preventing them.
They could do so by monitoring transactions and blocking suspicious payment flows, for instance.
Ms Lim then urged the government to consider the United Kingdom’s (UK) solution, which would require banks to fully reimburse scam victims by law from next year onwards.
This would apply in cases save for ones involving cryptocurrency, international payments, as well as fraudulent or negligent customers. It would also not be time-consuming or resource-intensive.
“I believe that this solution can and should be implemented in Singapore,” Ms Lim said.
She added that Singaporeans would be more confident in their transactions. Additionally, it would ensure that they receive compensation without having to undergo complex processes.
Furthermore, an analysis in the UK showed that reimbursing victims would cause banks to be more proactive in detecting and preventing scams, reducing such instances.
As a result, she disagreed that such a policy would be unfair to banks.
Replying to Ms Lim, Mr Tan acknowledged that financial losses from scams can be substantial.
However, he stated that there needs to be a balance between fairness, accountability, and compassion.
Source: MCI Singapore on YouTube
“Full restitution, without due consideration of culpability, is neither fair nor desirable,” he said.
Doing so can erode vigilance and personal responsibility and lull users into complacency.
He also pointed out that MAS requires banks to secure digital systems through multi-factor authentication to verify users’ identities and authorise transactions.
Source: MCI Singapore on YouTube
Banks additionally send notification alerts to customers so that they can immediately report anything unauthorised.
Even so, Mr Tan noted that scammers could still bypass these measures by tricking customers into divulging their banking credentials.
As such, users have the individual responsibility of practising good cyber hygiene and protecting access to their accounts.
Ms Lim also raised the issue of reintroducing physical tokens for two-factor authentication (2FA).
Currently, she said, digital tokens or SMS verification are rendered ineffective if devices become infected with malware.
To this, Mr Tan said customers can ask for a physical token and added that MAS is looking into the recommendation.
As for scams regarding cryptocurrency, Mr Tan said MAS is looking into such spaces and would regularly review regulations.
In addition, Ms Lim said MAS should do more to protect victims from unfair settlements with banks.
Describing these as “paltry” in comparison to the losses, she said the agreements are one-sided and urged MAS to consider the adoption of regulatory guidelines.
Responding to her, Mr Tan said MAS monitors how banks handle such disputes.
If customers remain unsatisfied with goodwill payments, they could decline the offer and approach the Financial Industry Disputes Resolution Centre for mediation or pursue it even further in court.
“Scams are an ever-present and evolving threat,” Mr Tan concluded. “The government will spare no effort to implement effective upstream and downstream anti-scam measures.”
Also read: S’pore Mooncake Scam Cost 27 Victims S$325K, Police Warn Against Clicking Suspicious ‘Payment’ Links
Have news you must share? Get in touch with us via email at news@mustsharenews.com.
Featured image adapted from MCI Singapore on YouTube.
Even low levels of contamination in dairy products can pose "a significant risk", SFA said.
It's "not unusual" for rats to be seen at food stalls, said a man who…
No ambulance assistance was required, SCDF said.
Both drivers said they misjudged the water level.
The teen was sent to a hospital after getting rescued.
The man will be permanently banned from the entering Thailand.