SINGAPORE: Setting a value of below S$50,000 for banks to block or hold transactions as part of their fraud surveillance duty “could generate too many false alerts” and cause inconvenience for most banking customers, said Minister of State for Trade and Industry Alvin Tan in parliament on Tuesday (Nov 12).
Mr Tan was responding to questions about the shared responsibility framework for phishing scams, which will kick in on Dec 16.
The framework, first mooted in early 2022, seeks to prescribe how losses arising from phishing scams will be shared among financial institutions, telecommunication companies and consumers. It spells out specific duties for the companies, making them liable to pay if they have fallen short of their responsibilities.
The finalised framework includes an additional duty for banks to perform real-time fraud surveillance to “detect if a customer’s account is being rapidly drained of a material sum” due to a phishing scam.
An account would be considered as rapidly drained of a material sum if it had an account balance of S$50,000 or more immediately prior to the unauthorised transaction, and if more than half of that account balance was transferred out within the last 24 hours.
When this happens, the financial institution must either block the suspicious transaction until it is able to obtain further verification from the customer, or notify the customer while holding the transaction for at least 24 hours.
Responding to questions about how the threshold of S$50,000 was determined, Mr Tan noted that the authorities “must strike a balance between protecting customers and the inconvenience posed to consumers conducting legitimate transactions”.
“Setting a lower value could generate too many false alerts and result in inconvenience to the majority of customers,” he said.
However, banks are expected by the Monetary Authority of Singapore (MAS) to consider other factors in their fraud surveillance. These include a customer’s profile and potential vulnerability to scams, as well as spending patterns.
“These go beyond what is set out in the (shared responsibility framework),” said Mr Tan who is a MAS board member.
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