Officials in Singapore said on Monday that they will deliver a consultation document next month outlining a split liability model that will put both consumers and banks on the line for money lost as a result of scams.…
It provides a solution to a topic that is frequently asked in today’s society: who is accountable in a world where payment and transfer scams are pervasive?
Shared loss programs have also been proposed by nations like Australia. In the meanwhile, the European Commission has suggested a “refund” to those who have fallen victim to specific fraud schemes, such as authorized push payment scams.
The UK will require banks to reimburse fraud victims up to one million pounds starting in 2019. The sender and receiving institutions will split the cost.
Alvin Tan, the state minister of Singapore, holds a different perspective.
Some people believe that banks can readily sustain losses caused by certain scam situations. Full compensation, however, without taking into account blame is neither just nor desirable, he told Parliament on Monday.
It was initially planned for Singapore’s shared responsibility framework to be finished in the first half of 2023. Tan acknowledged on Monday that the procedure had taken longer than the government would have preferred, but a version outlining countermeasures to phishing scams ought to be finished by the end of the month.
In February 2022, when threat actors used spoof SMS messages to defraud 800 customers of a single bank out of a total of SG$13.7 million ($10.2 million), Singaporean authorities initially proposed a shared liability method.
After the Monetary Authority of Singapore (MAS) took enforcement action, Oversea-Chinese Banking Corporation (OCBC) changed its tune and announced that it would provide “full goodwill payouts” to all victims. Initially, OCBC offered “goodwill” payments to a pitiful 6.4 percent of claimants.
The city-state had to reconsider its anti-scam tactics due to the sheer size of the needed payment.
In the future, clients and banks will share responsibility for any losses, according to Lawrence Wong, the former finance minister and current deputy prime minister, in order to prevent a “weaken[ed] incentive to be vigilant” on the part of the customer.
Currently, the MAS mandates that banks secure their digital systems, including using multi-factor authentication when customers make purchases online. Additionally, some transactions call for the sending of notifications, and banks have received instructions on how to handle and look into disputes. The MAS is in charge of those initiatives. All the attempts, however, fall short against determined social engineers.
“Banks must evaluate whether they have met their commitments in scam situations, as well as if the victim had behaved appropriately. Customers who followed proper cyber hygiene practices and took care to keep their login credentials and [one-time passwords] private shouldn’t be held responsible for losses, according to Tan.
In the existing system, dissatisfied clients have the option to file a lawsuit, while others can accept the terms and circumstances of any settlement.
According to parliament member Sylvia Lim, the agreements that arise typically come with a nondisclosure agreement and financial disappointment are what many victims reluctantly sign.