Reply to Parliamentary Question on Proposal for Default Opt-in Cooling-off Period for Cross-border Fund Transfers of Large Amounts to Prevent Fraud
QUESTION NO 2272
NOTICE PAPER 890 of 2022
FOR WRITTEN ANSWER
Date: For Parliament Sitting on 10 January 2022
Name and Constituency of Member of Parliament
Assoc Prof Jamus Jerome Lim, MP, Sengkang GRC
To ask the Prime Minister whether the Government has considered instituting mandatory or default opt-in cooling-off periods of a short duration for large, potentially anomalous transactions involving cross-border fund transfers, to allow for fund recovery in cases where victims become aware of the fraudulent nature of the scam relatively soon after they are perpetrated.
Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1 MAS takes the issue of scams involving online banking accounts very seriously, and is working actively with other government agencies and the banking industry to address the problem.
2 There has been a rising number of such scams and frauds. Most recently, many customers of one of our local banks were tricked into divulging their internet banking credentials to scammers, who were then able to siphon funds out of the customers’ bank accounts. The banks have been issuing repeated warnings on their digital platforms about such scams, but the scams have become more sophisticated and more bank customers have fallen prey.
3 We are coordinating our efforts to address this growing threat through the Inter-Ministry Committee on Scams. One key area of progress has been the strengthening of funds recovery for victims of such scams. The Singapore Police Force (SPF) works with banks in Singapore to freeze within one day, domestic bank accounts receiving scam monies.
4 As was implied in the question from Assoc Professor Lim, the freezing of overseas accounts is more challenging as it involves agencies in different jurisdictions. But of late, there has been some progress in this area. For example, between June and September 2021, through strong information-sharing and collaboration by the SPF and its international law enforcement counterparts, ten transnational syndicates perpetrating job scams, internet love scams, and impersonation scams were busted by the Royal Malaysian Police and the Hong Kong Police Force. I understand that the Ministry of Home Affairs will be providing more information on the efforts by the Inter-Ministry Committee on Scams, and on SPF’s initiatives, in response to the PQ by Mr Christopher de Souza scheduled for the 11 January Sitting.
5 Notwithstanding progress on these fronts, we are deeply concerned with the recent uptrend in online scams and the financial losses suffered by unsuspecting customers. MAS is working with banks and payment institutions to explore additional measures to mitigate the risk of scams, without impairing the speed and convenience of payments that customers expect and would want for legitimate transactions. A cooling-off period is among the measures we have been considering, to see if it could be a practical way to avoid certain types of scams. We are also exploring other measures even further upstream in the chain of transactions, including lowering default transaction limits and notification thresholds, and enhancing fraud surveillance systems to detect and block anomalous transfers more promptly. There will also be a public consultation on the recommended measures, to provide clarity on the responsibilities of financial institutions and consumers to protect e-payments, as well as liability apportionment principles in the event of fraudulent transactions.
6 The tactics employed by scammers will continue to grow in sophistication. Each of us has to exercise utmost caution when transacting online. Never pursue online deals that appear too good to be true. Never click on unverified links. Never divulge your internet banking credentials or passwords to anyone. Closely monitor transaction notifications so that any unauthorised payments are reported early enough to increase the chances of recovery. We can address the scourge of scams if all of us are on guard and play our part.