Experts say that consumers are likely to face even tighter controls but as long as safeguards are clear and proportionate, with a proper avenue for recourse, there is no need to be concerned.
When 29-year-old Kenneth Lee noticed an investment opportunity in a Telegram channel earlier this year, it appeared legitimate enough.
At first, he made small transfers of S$500 or S$1,000 – and even saw small “profits” reflected in the app. Encouraged, he sent larger amounts of S$5,000, S$10,000, and finally larger sums of S$20,000.
Over two months, he had transferred close to S$165,000 – his entire life savings. Then the chat group disappeared and the money vanished.
“If the bank had just called me or paused any of the transfers, I’d have been super grateful,” said Mr Lee, a marketing professional.
He added that the slew of measures introduced this year to curb scams are necessary given how rampant scams have been as of late.
“It’s getting out of control.”
While individuals like Mr Lee are glad for added protections, some consumers feel the authorities are being overly cautious and argue that such safeguards are only meant to protect a small pool of naive individuals, at the detriment of everyone else.
Among their gripes: the new safeguards are troublesome and the 24-hour delay or sudden transaction blocks can be disruptive for people making urgent or legitimate transfers.
Then, there’s also the issue of what kind of controls banks and authorities should have over personal accounts.
Mr Rain Tan, 48, said he understands there is merit for scam prevention but finds it “too broad a brush”. The civil servant said he has savings in fixed deposits and the safeguards make it cumbersome to move large deposits between banks.
“It’s almost impossible for me to switch banks easily after my fixed deposit expires,” he said. “My daily transfer limit is capped at S$200,000, so it takes several days to move my money, with cooldowns and waiting periods in between.”
He suggested that the bank should have a pre-approved or whitelist of payees that go through stringent checks, and these customers should be exempt from these measures.
“Most of the time, people – myself included – are just transferring money to their own accounts in another bank. Can you imagine how many days it would take to move, say, half a million, even if the other account is in my name?”
These latest powers given to Singapore banks and the police to intervene when they detect potential scams comes after much public consultation and debate and almost as a last resort to get the upper hand over scammers.
Like many other countries globally, the nation has been grappling with an uptick in scams for several years.
Scams ranked among the top crimes in Singapore for the last four years – in the first half of this year alone Singapore residents lost S$456.4 million to scams.
A shared responsibility framework was first announced back in February 2022 after close to 800 OCBC customers lost S$13.7 million.
The following year the Monetary Authority of Singapore and the Infocomm Media Development Authority started gathering feedback for the framework which aims to strengthen the direct accountability of financial institutions and telcos to customers for losses incurred from phishing scams.
The public consultation paper captured the suggestions of several members of the public on making financial institutions responsible for fraud surveillance and detection and block potential fraudulent transactions.
In January, a new law was passed providing the police with powers to order banks to restrict the banking transactions of potential scam victims.
The Protection from Scams Bill came into force in July and allows police to issue Restriction Orders that temporarily limit access to a person’s bank account if they believe the person is part of an ongoing scam.
These restriction orders will suspend money transfers, the use of automated teller machines and all credit facilities, although individuals will still be provided access to their monies for daily living expenses.
Such orders can be issued for a maximum of 30 days at the outset and each order may be extended up to five times if authorities deem it necessary.
Just earlier this week, a new anti-scam measure was also introduced which allows banks to hold or reject transfers from accounts with balances of at least S$50,000 and if withdrawals over 24 hours amount to more than half of the total funds.
During the 24-hour cooling period, customers who realise they have been scammed can then cancel the transaction. If the transactions are legitimate, the funds will be released after the cooling period.
LESS COAXING, MORE CONCRETE WAYS TO HELP: BANKS
Banks said that increasing their powers to keep scams at bay is absolutely necessary given the proliferation of artificial intelligence and deepfake technology.
The modus operandi of scammers is continually evolving and at a rapid pace, even fooling those who are digitally savvy, they said.
And without such measures, their hands are tied even when they are 100 per cent certain their customers are being drained of their funds.
Mr Sukhvinder Singh, head of digital banking at Maybank Singapore, said that before the new laws took effect, frontline staff at the bank often felt legally constrained from stepping in.
Maybank staff would encounter customers who were “absolutely convinced” they couldn’t be scammed and became defensive when questioned about their transactions.
Some customers even threatened to close their accounts or post complaints on social media if their withdrawal requests weren’t processed, he added.
“These experiences were incredibly challenging because, at the time, the bank had limited legal grounds to delay or stop a transaction without the customer’s consent,” said Mr Singh.
Mr Raymond See, a member of DBS’s Anti-Scam team, said even now with new laws in place, defensive customers push back and lash out at his team, insisting that a transfer be approved.
“We have to stay firm and not let the transfer go through, because our goal is to save as much of the customer’s money as possible,” he said, adding that no amount is too small to save once a scam has been identified.
In the end, he said, “quite a number of customers” – even those who argue – call the bank within the 24h window to cancel the transactions themselves.
“The 24-hour period gives customers a cognitive break … a chance to step back, think and sometimes talk to someone they trust before proceeding,” said Mr See.
Banks acknowledged that the new measures may seem restrictive but said they were in place to ultimately protect consumers.
Mr Singh said that safeguards need to “strike the right balance between protecting customer rights and preventing irreversible losses”.
Mrs Ong-Ang Ai Boon, the director of The Association of Banks, said that measures have already yielded positive results with S$78 million of loss monies averted in the first seven months of this year.
“While these measures may introduce more friction, consumers’ protection is a priority,” she said.
In response to queries from CNA TODAY, the Police said that as of September, they have issued six restriction orders to banks to restrict the banking transactions of six individuals.
Source: https://www.channelnewsasia.com/today/big-read/scams-powers-authorities-bank-police-5405076