Banks Should Not Be Expected to Bear Full Burden of Scam Losses, Says Alvin Tanby Fintech News Singapore September 20, 2023
Alvin Tan, Minister of State at the Ministry of Trade and Industry, shot down the proposal for banks to bear full responsibility for scam losses in his response to the Motion on “Losses from Scams and Malware Fraud: Doing Right by Bank Customers”.
“Full restitution without due consideration of culpability is neither fair nor desirable. He said that doing so could erode vigilance and personal responsibility, and lull users into complacency.”
He said that individual customers thus also have an important responsibility to protect access to their accounts, and this includes practising good cyber hygiene and being diligent in preventing their login information and OTPs from being divulged to third parties.
Additionally, the Monetary Authority of Singapore (MAS) has issued guidance for banks to institute clear customer handling and investigation processes and to treat customers fairly in all disputes. MAS also monitors how banks handle such disputes.
In scam cases, banks must consider if they have fulfilled their obligations, and whether the victim had acted responsibly.
Tan added that customers who practised good cyber hygiene and were diligent in preventing their login information and OTPs from being divulged to third parties, should not have to bear losses.
He concluded by saying that the government is committed to fighting scams, and is working to implement effective upstream and downstream anti-scam measures, and is also working to educate the public about scams.
Tan said that the government believes that it is important to strike a balance between fairness, accountability, and compassion when it comes to scam losses.
The Singapore government aims to publish a consultation paper for a framework on the sharing of losses in scam cases next month, focusing on phishing scams as a start.
The government is also monitoring other countries, including the UK, which have either implemented or are considering mechanisms to mitigate the burden of scam losses. This will be taken into account during the development of this framework.