WP Singapore Calls For Banks To Fully Reimburse Scam Victims
Sylvia Lim, the chairperson of Singapore’s Workers’ Party (WP), has called for a legal mandate requiring banks in the country to fully and promptly reimburse victims of scams. She draws inspiration from the United Kingdom’s plan to enforce bank compensation for scam victims from 2024. Lim made her case during a parliamentary session on September 18th. She also highlighted Australia’s contemplation of similar measures. Additionally, she mentioned the European Commission’s proposal for refunding victims of authorized payment fraud in specific situations.
Lim expressed her dissatisfaction with the current approach of the Monetary Authority of Singapore (MAS). The MAS holds bank customers partially accountable for losses incurred due to scams, and this aspect drew her criticism. She argued that consumers lack the tools and knowledge to effectively combat scams. She mentioned that banks, with their resources and technological capabilities, should take the lead in preventing such fraudulent activities.
Proposal modelled after UK’s bank scam victim laws
The proposed mandatory reimbursement system in Singapore, modeled after the UK’s, would encompass all transfers between banks in the country through PayNow and Fast (Fast And Secure Transfers). It would primarily protect consumers, small businesses, and charities. This protection would instil confidence in these payment methods. It would also ensure swift compensation for scam victims without the need for complex adjudication processes.
However, Minister of State for Trade and Industry Alvin Tan expressed concerns that requiring banks to fully reimburse scam victims might lead to a decline in vigilance and personal responsibility among users. He argued for a balance between fairness, accountability, and compassion. He stated that full restitution without considering culpability is neither fair nor desirable. Finally, he emphasized the importance of customers safeguarding their accounts through cybersecurity measures and diligence in protecting sensitive information.
Lim also inquired about the delayed publication of the consultation paper on the equitable sharing of losses incurred by scam victims. MAS had initially planned to release the framework within three months, but the complexity of the issues involved caused delays. Tan assured that the government aimed to publish the consultation paper the following month, focusing initially on phishing scams.
Suggests for reintroduction of physical tokens
In addition to advocating for stronger protections for scam victims, Lim suggested the reintroduction of physical tokens as the default measure for two-factor authentication (2FA). This suggestion stemmed from the vulnerability of mobile phones in digital tokens and SMS-based 2FA methods. Minister Tan stated that customers could request physical tokens, and MAS was exploring this suggestion.
Lastly, Lim proposed implementing additional verification checks, including mandatory delays, transfer limits, and extra authentication for transfers to bank accounts associated with cryptocurrencies due to the heightened risks involved. Minister Tan reassured that MAS was actively monitoring the cryptocurrency space and would regularly review its regulatory framework.
In summary, Sylvia Lim urged the Singaporean government to consider legal requirements for banks to fully reimburse scam victims, taking inspiration from the UK’s approach, while highlighting the need for fairness, accountability, and protection against scams. She also called for improvements in customer-bank settlements, 2FA methods, and additional verification checks for cryptocurrency-related transfers. Minister Tan emphasized the importance of balancing these measures with personal responsibility and cybersecurity practices.
