Consultation paper on equitable sharing of scam losses to be published in October 2023

SINGAPORE: The Singapore government will publish a consultation paper next month on an equitable loss-sharing framework for financial scams, said Minister of State for Trade and Industry Alvin Tan on Monday (Sep 18).

The framework, which aims to spell out how losses from scams are to be shared between consumers and financial institutions, was first announced in February 2022 after close to 800 OCBC customers lost a combined S$13.7 million to scammers. 

The Monetary Authority of Singapore (MAS) said then it would publish, within three months, a draft framework for public consultation. But the process has taken “longer than expected” due to the complexity of the issues involved, the financial regulator said in previous parliamentary replies.

Providing an update in parliament on Monday, Mr Tan said: “While this has taken longer than we would like, the government aims to publish a consultation paper on the framework next month, focusing on phishing scams as a start.”

He was responding to an adjournment motion filed by Workers’ Party (WP) Member of Parliament Sylvia Lim, who requested for an update on the draft framework.

Ms Lim also gave three suggestions on how to better protect banking customers from scams. For instance, she urged the government to consider ideas from other jurisdictions such as the United Kingdom, where from next year, banks will be required by law to reimburse fraud victims.

Mr Tan replied that authorities were monitoring developments abroad and will “take them into account” as the loss-sharing framework is developed further, including for other types of scams in the digital payments ecosystem.


In her speech, WP chair Ms Lim first raised an “inadequacy” in the framework Singapore is considering for loss-sharing from scams.

While details have not yet been published, authorities previously indicated that customers have a responsibility to take necessary precautions and should be expected to bear a proportion of the loss, depending on whether they have fallen short of their responsibilities.

The WP chair described this as “inadequate and unjust”, saying that customers are not sufficiently equipped to combat increasingly sophisticated scams.

Determining what is equitable in each case will also take time, said Ms Lim, citing the Financial Industry Dispute Resolution Center (FIDReC) which oversees such disputes and sees most cases being resolved within six months.

This “would be an inordinate and stressful delay” for those whose life savings have been wiped out, she said.

It would also be difficult “on a practical level” for certain vulnerable groups, such as the elderly, to gather and present evidence to prove that they have taken necessary precautions, she added.

In his reply, Mr Tan said determining responsibility for scam losses was a “difficult issue”.

“Doing so can erode vigilance and personal responsibility, and lull users into complacency,” he said.

Mr Tan added that banks are required by the MAS to have secure digital systems, such as implementing multi-factor authentication to verify customers’ identities and authorise online transactions.

But scammers can still bypass these measures by deceiving customers into divulging their account access credentials or downloading malware, he said, adding that individual customers have the responsibility to protect access to their accounts through ways such as good cyber hygiene.

Meanwhile, MAS has issued guidance for banks on investigation processes and how to treat customers fairly in all disputes. The regulator also monitors how banks handle such disputes, said Mr Tan.

He also noted that the government was looking at Ms Lim’s suggestion on reintroducing physical security tokens, as well as monitoring the adequacy of rules regarding digital payment tokens and procedures at FIDReC.

Singapore currently adopts a three-pronged strategy to fight scams, ranging from upstream measures such as the ScamShield mobile app which filters and blocks scam messages and calls; to downstream measures like additional safeguards adopted by banks, he said.

From January to June this year, the total amount that victims reported to have been cheated – S$334.5 million (US$245.7 million) – dropped by 2.2 per cent from S$342.1 million in the same period in 2022, according to data released by the police last week.

In a press release on Monday, the Association of Banks in Singapore said major retail banks here have enhanced their security measures to protect customers from malware scams, and will “progressively introduce refinements or new measures to keep pace with changes in the threat landscape”.

For example, OCBC rolled out a feature last month that prevents users from logging onto their banking app if it detects potentially risky apps downloaded from unofficial portals. Citibank has also introduced a similar anti-scam feature on its mobile app.