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“Neither Fair Nor Desirable”: Gahmen Refuses to Require Banks to Reimburse Scam Victims

Workers’ Party chairman Sylvia Lim urged the government in parliament yesterday (18 Sep) to require banks to reimburse victims of scams, and in a timely manner.

However, this was shot down by PAP MP Alvin Tan, who said that doing so could erode vigilance and personal responsibility, and lull users into complacency.

Tan is currently Minister of State for Trade and Industry.

In her adjournment motion speech calling on the government to do more to help scam victims, Lim cited Britain’s upcoming law to make it mandatory for banks in Britain to reimburse victims.

Such victims include those who have lost funds after being tricked into revealing their account details through fake websites and spoofed SMS messages, among other tactics, despite having exercised sufficient caution.

The Australian government is currently studying such measures.

The European Commission has also proposed refunding victims of authorised payment fraud, under certain circumstances.

Lim said that the current Monetary Authority of Singapore (MAS) approach of putting the responsibility on customers instead of banks is inadequate and unjust.

This is becaue banks are best positioned and have the resources to take the lead in fighting scams, while customers are not sufficiently equipped.

“Banks should take on an outsized role in preventing them. Banks are able to monitor transactions, block suspicious payment flows and keep abreast of the latest technological developments. Such endeavours are beyond the remit of most bank customers.”

Lim proposed that mandatory reimbursements could cover all transfers between banks in Singapore via PayNow and FAST inter-bank tranfers.

“Like the UK system, it could be scoped to protect customers who are consumers, small business and charities… This would give Singaporeans the confidence to transact using these methods without fear that their savings will be unknowingly siphoned off. It would also ensure that victims of these scams would be compensated in a timely manner without having to undergo a complex adjudication process.”

Acknowledging that losses in any single scam case can be substantial, Tan said that there must be a balance struck between fairness, accountability and compassion.

“There are some views that banks can easily absorb losses arising from individual scam cases. However, full restitution without due consideration of culpability is neither fair nor desirable.”

Tan added that customers have the responsibility to protect access to their accounts.

This includes practising good cyber hygiene and being diligent in preventing their log-in information and one-time passwords from being divulged to third parties.

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