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The government will aim to issue a public consultation paper on a loss-sharing framework between scam victims and financial institutions in Q3 2023, said Senior Minister Tharman Shanmugaratnam in a written parliamentary reply on May 8, 2023.

The reply was in response to a question put forth by Sembawang GRC MP Lim Wee Kiak for an update on the framework, which was first announced by Deputy Prime Minister and Finance Minister Lawrence Wong in Feb. 2022 to be in the works.

Framework aims to achieve "fair treatment" for scam victims

The question of whether financial institutions should help bear the losses of scam victims came into the spotlight in early 2022, when around 790 OCBC customers lost over S$13m to phishing scams in late 2021.

OCBC reimbursed all affected customers, but Wong stated this is a one-off goodwill gesture and "(does) not set a general precedent for future cases".

He stated that the new framework for sharing the losses would be "common and equitable", and scam victims would receive "the same fair treatment" no matter which bank they go to.

Telcos might also be held accountable under framework

The framework is being designed by the Payments Council, chaired by the Monetary Authority of Singapore (MAS) in coordination with other government agencies.

Tharman explained that the development of the framework had taken some time as it entails defining clearly the type of scams that should be covered by the "shared responsibility framework", as there is otherwise a wide range of scam typologies.

The government also aims to strengthen the roles and accountabilities of other key parties, such as telecommunications companies (telcos), which can mitigate the risk of phishing scams.

Bank customers have to bear responsibility too

Tharman said the framework would decide on the specific duties and actions expected of banks and telcos to provide adequate safeguards against phishing scams without making digital payments cumbersome for customers, as well as defining the responsibilities of customers.

The framework will also establish the appropriate mechanisms for sharing losses amongst these parties when scams occur, and duties are breached.

"The government has been engaging closely with industry stakeholders on this framework and will continue doing so," Tharman added.

Top image via Facebook Tharman Shanmugaratnam & Google Streetview