Framework for Equitable Sharing of Losses between Scam Victims and Financial Institutions
Prime Minister's OfficeSpeakers
Summary
This question concerns Dr Lim Wee Kiak’s inquiry regarding the progress of a framework for equitable loss sharing between scam victims and financial institutions. Senior Minister and Coordinating Minister for Social Policies Tharman Shanmugaratnam stated the Government is clarifying accountabilities for financial institutions, telecommunications companies, and customers to mitigate phishing scam risks. The framework will define specific duties and loss-sharing mechanisms when those duties are breached, balancing security with user convenience. Work involves identifying covered scam typologies and studying the inclusion of other digital payment ecosystem entities. The Government intends to issue a public consultation paper on the framework in the third quarter of this year.
Transcript
50 Dr Lim Wee Kiak asked the Prime Minister whether he can provide an update on the progress of the framework for equitable sharing of losses between scam victims and financial institutions.
Mr Tharman Shanmugaratnam (for the Prime Minister): The Government has been working to develop a clear framework to mitigate losses by victims of phishing scams where customers are deceived into revealing their account credentials to scammers impersonating legitimate entities. This builds on the work done last year by the Payments Council chaired by the Monetary Authority of Singapore on a framework for the equitable sharing of losses due to phishing scams that involve financial institutions (FIs).
Our aim is to strengthen the roles and accountabilities of the key parties who can mitigate the risk of phishing scams and to preserve confidence in digital payments in Singapore. This includes making clear the duties of FIs and telecommunications companies (telcos) in particular, and the responsibility of customers themselves to be vigilant against scams.
The Government has been in discussion with telcos, who play a key role in the SMS infrastructure, with a view to including them in the framework, besides the FIs. We are also studying the roles of other entities in the digital payments ecosystem and whether they should, eventually, also be brought within the framework.
The development of the framework has taken some time. It entails defining clearly the type of scams that should be covered by this shared responsibility framework, as there is otherwise a wide range of scam typologies. It also involves deciding on the specific duties and actions expected of banks and telcos so as to provide adequate safeguards against phishing scams without making digital payments cumbersome for customers, as well as defining the responsibilities of customers. Further, the framework will 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. We aim to issue a public consultation paper in the third quarter of this year.