At first glance, this appears to be a necessary and commendable step toward combating financial fraud. Financial scams in Singapore reached SGD $385.6 million in just the first half of 2024. Thus, it pretty much seems like the urgency for protective measures is fitting.
However, the law’s broad wording and lack of clearly defined criteria may raise concerns. Most of these doubts are about the potential for overreach and the violation of personal financial autonomy.
Let’s see what I mean by that.
First, we already know that scam threats are legitimate. One Google search, and you can see how many real-world cases illustrate it. And after reading most of it, you can conclude that it all comes down to mostly one outcome: the agenda on the dire need for more protective measures.
A report from last year, for instance, detailed the case of a Singaporean woman who lost SGD $130,000 from her bank accounts despite repeated warnings from both the police and her bank.
Over two months, she transferred her savings and took out additional loans, accumulating a total loss of SGD $330,000. The case highlights the psychological grip scams can exert on victims, who mostly, to my surprise, refuse to believe they are being defrauded even when presented with evidence.
You might not be entirely to blame for getting scammed the first time. But falling for a scam again, even after receiving warnings, highlights how persuasive these schemes can be and the need for stronger safeguards.
The Protection from Scams Act 2024 by the government of Singapore could have prevented her from depleting her finances, saving her from being left with no money.
A Law to Stop Scams Before They Happen
According to Nizam Ismail, CEO of Ethikom Consultancy—a firm specialising in financial regulation, compliance, and risk management, assisting financial institutions, FinTech firms, and multinational corporations in navigating regulatory frameworks—the Act is fundamentally about “protecting individuals from themselves” in cases where they might unknowingly transfer money to scammers.
While he acknowledges the compelling need to prevent scams, he also highlights the necessity of balancing this protection with financial autonomy.
The rise in financial scams, particularly those involving sophisticated phishing schemes and social engineering tactics, has necessitated stronger regulatory action and the Act can do just that.
The Singaporean government argues that speed is of the essence when dealing with scam victims. The problem arises because some individuals fail to recognise they are victims until it’s too late (like the case mentioned earlier).
The bill enables police officers to issue Restriction Orders (ROs) to banks. So, what does this RO mean?
It signifies that police can temporarily order for the halting of suspicious transactions. They can also call for the disabling of ATM access and restricting any use of physical cards. The intervention serves as a financial buffer, giving victims time to reconsider their decisions before losing their savings to fraudsters.
Taking Lessons from Its Neighbours
Other nations have already recognised the importance of such measures. Singapore’s closest neighbour, Malaysia, enacted a somewhat similar law last year. But instead of freezing the accounts of scam victims, it specifically targets mule accounts.
Amendments to the Penal Code and the Criminal Procedure Code give Malaysian police new powers. They can now freeze and seize funds from accounts suspected of being used in scam operations.
These amendments, effective from October 30, empower officers to block suspicious financial transactions and prevent scammers from withdrawing stolen money.
The Malaysian approach offers a precedent, demonstrating how legal mechanisms can prevent stolen money from disappearing into untraceable international accounts. It can also happen while avoiding the direct restriction of scam victims’ assets.
I would argue that the Singapore Protection From Scams Act 2024 takes this a step further. They are empowering law enforcement to intervene way before the transaction can occur, rather than simply recovering lost funds.
Despite the potential benefits, the law also raises critical concerns about financial autonomy and the role of law enforcement in personal banking decisions.
Nizam acknowledges the compelling need to prevent scams, but he also highlights the necessity of balancing this protection with financial autonomy.
Nizam Ismail
“The regime is necessary, but because the Act has very intrusive powers, it should have put in place stronger safeguards for financial autonomy of account holders,” he states.
This is all due to the vague phrasing of the legislation. Particularly the clause stating that ROs can be issued when there is a “reason to believe” that an individual may be at risk, which creates ambiguity.
Two questions sprung to me. What constitutes a “reason to believe”? And how will law enforcement determine who is at risk without overstepping their authority?
The principle that “the law is a very precise endeavour,” as famously quoted by Louis Litt in the famous TV show Suits, is particularly relevant here. The law’s success hinges on clear definitions and transparent processes.
Nizam suggests that a more objective standard would be a better legal framework. He proposes something along the lines of “reasonable grounds to believe that an offence has been committed and that a scam victim will instruct the bank.”
This, he argues, would help minimise subjectivity and reduce the risk of overreach by law enforcement.
However, the law still provides some guidance, in a way. As I mentioned earlier, a specified officer (police or Commercial Affairs Officer) can issue an RO if they have reason to believe the individual will send money to a scammer. Factors considered include the time needed to implement protective measures and other relevant circumstances.
But the Act does not provide a strict legal test for how this determination is made. Which in return, leaves a big room for subjective interpretation by law enforcement.
This discretion means that decisions may vary on a case-by-case basis, thus reinforcing my concerns about potential overreach.
Can We Trust the Police to Get It Right Every Time?
Another issue that just irks me is the lack of an independent appeals process. Currently, victims can appeal ROs only to the Commissioner of Police, whose decision is final.
Nizam, from all of his experience in law, said that a more independent review process is needed.
“Such as an appeal to a magistrate or an ombudsman-like agency would provide stronger credibility and ensure affected individuals have access to checks and balances,” he suggests.
For this law to be effective, Singaporean citizens must first have confidence that their financial rights will not be arbitrarily violated.
Currently, I do believe that trust in institutions is strong. However, laws that grant sweeping powers without precise limitations can erode that trust. I am not trying to rile people up against the authorities. But how can we be sure that the police will always make the correct decision?
After all, there are some instances around the globe of law enforcement not being truly truthful.
While the law includes safeguards—such as the right to appeal ROs and the ability to access essential daily expenses—concerns remain about the discretionary nature of police power.
Do note that victims, however, can appeal ROs, but only to the Commissioner of Police, whose decision is final. To me, this is a little unfair.
There is also no external or independent review beyond law enforcement stated, making transparency a valid concern.
One important detail missing from many discussions is the duration of Restriction Orders. The Act states that ROs last for 30 days initially and can be renewed up to five times. If my maths is correct, it means that an individual’s account could be frozen for a maximum of six months.
So, there is a possibility that a person just can’t use their bank account for 6 months in a digitally savvy nation like Singapore? Seems “pretty reasonable” for someone who’s about to get scammed?
A Step in the Right Direction, But Needs A Little Tweaking
While the Act is largely on track, the CEO at Ethikom emphasises the need for stronger measures to ensure financial autonomy. He points out that during the MHA’s public consultation exercise, it was stated that “the RO will only be used as a last resort when all other options to the victim have been exhausted.”
Nizam notes, however, that the actual provisions of the Singapore Protection From Scams Act do not reflect this policy intent. Such omission raises concerns about how authorities might apply these powers. And I agree with him on this.
The government must refine the law to ensure it effectively targets scam prevention while maintaining citizens’ financial autonomy.
This could involve implementing clearer definitions of what constitutes “reason to believe”. Plus, it is also best to introduce independent oversight mechanisms to review RO decisions. Additionally, transparency measures could alleviate concerns about misuse. This includes mandatory reporting on the number and reasons for issuing ROs.
Another potential safeguard is allowing individuals to voluntarily enrol in scam protection programs. Individuals could also opt in to enroll in restrictions that temporarily pause suspicious transactions, instead of facing automatic police intervention.
This would empower citizens to take control of their financial security while still providing protective measures.
It Is All About Protection Against Scams
In the end, I want to be clear that I am not against this law.
In fact, I believe it is the right step forward in curbing the number of scam incidents. The law specifically targets those who may be more vulnerable (read: gullible) or less tech-literate.
However, authorities must make some tweaks in addressing the ambiguity surrounding its implementation to ease public concerns. This could also help to ensure that it functions as a protective measure rather than constituting a potential overreach of authority.
I just hate to see injustice happen, or even worse, people not being able to use their bank accounts for months.
How are they going to live?
Clarification Note:
The Singapore Protection from Scams Act 2024 is designed to prevent financial fraud by allowing law enforcement to temporarily restrict bank transactions when there is a reason to believe that an individual may be at risk of being scammed. While this article discusses concerns regarding the law’s implementation, it is important to acknowledge that safeguards such as an appeals process and a defined duration for restriction orders exist within the legislation. For official details, refer to the full text of the Act here.
