When can scam victims expect payout under the proposed shared liability framework?

SINGAPORE – Scenarios of when scam victims can expect to receive full payouts from banks and telecommunication providers were detailed in a proposed framework published by regulators on Thursday.

The Shared Responsibility Framework, proposed by the Monetary Authority of Singapore and Infocomm Media Development Authority, places duties on financial institutions and telcos, making them liable to pay if they have fallen short of these duties.

For banks, these include notifying users of outgoing transactions; for telcos, implementing anti-scam SMS filters and ensuring that messages from SMS aggregators that broadcast messages on behalf of companies are authorised.

The report detailed potential scenarios for when users will receive a payout, and when they will likely bear the costs of falling prey to scams.

Potential scenarios

1) Investment scams

A victim is tricked by an investment scam on Facebook and loses money. The scammer instructs the victim to make bank transfers, which he does despite receiving real-time SMS transaction notifications.

In such cases, the proposed framework states that the consumer will bear the full loss, as the transactions made to the fraudster were authorised by the consumer.

2) Fake sales online

A victim is scammed by a fake furniture seller from overseas via WhatsApp. The victim enters his account credentials on a fake digital platform, providing the scammer with details to steal his money.

No payout can be expected by the consumer as the scammer is not a Singapore-based entity or a foreign-based brand known to offer services here, according to the framework.

3) Bank disruptions

The bank will pay consumers in full in the event of any scam that occurs during a system failure at the bank that prevents real-time notifications, the 12-hour cooling period for high-risk activities and the availability of a kill-switch from being available to customers.