Consumer Risk Assessment for Overseas Fraud Victims and Regulatory Guidelines for System Alert Delays and Consumer Loss Liability
Ministry of FinanceSpeakers
Summary
This question concerns risk assessments for overseas fraud victims unable to receive timely SMS alerts and bank liability for losses due to system delays. Mr Gabriel Lam inquired about regulatory guidelines regarding how banks account for these cases and whether consumers bear losses for circumstances beyond their control. Minister Gan Kim Yong explained that Monetary Authority of Singapore guidelines require real-time notifications via SMS, email, or in-app channels to ensure prompt communication. He emphasized that banks must treat customers fairly by considering unique circumstances and whether they fulfilled their obligations to send notifications in a timely manner. Customers dissatisfied with a bank’s determination can approach the Financial Industry Disputes Resolution Centre for mediation and adjudication regarding their losses.
Transcript
2 Mr Gabriel Lam asked the Prime Minister and Minister for Finance (a) whether MAS has assessed the risk to consumers when victims of fraudulent transactions are overseas or are unable to receive SMS alerts on a timely basis; and (b) whether regulatory guidelines can be provided on (i) how banks shall account for such cases and (ii) whether consumers shall bear losses arising from system delays of transaction alerts in circumstances beyond their control.
Mr Gan Kim Yong (for the Prime Minister): The Monetary Authority of Singapore's (MAS') E-Payments User Protection Guidelines require banks to provide real-time transaction notification alerts by way of SMS, email or in-app notification. Major retail banks generally offer parallel notifications through at least two channels, with in-app and email notifications being the common default channels. Customers currently receiving notifications by SMS can check if they are also receiving notifications via in-app and email notifications. If not, we strongly encourage that customers opt to do so with their banks, so that they have more channels to be kept informed promptly, even when they are overseas.
When notified of a scam, banks will look into each case. MAS expects banks to treat customers fairly and they must consider if they have fulfilled their obligations. This would include looking into whether notifications were sent in a timely manner. Each incident involves unique circumstances that banks will have to evaluate carefully. If a scam victim is not satisfied with the bank's determination, he or she has the option of approaching the Financial Industry Disputes Resolution Centre for mediation and adjudication.