Regulation for Protection of Consumers Affected by Fraudulent Transactions Involving Third-party Payment Platforms
Ministry of FinanceSpeakers
Summary
This question concerns MP Mr Gabriel Lam’s inquiry to the Prime Minister and Minister for Finance regarding regulatory guidance for determining liability in fraudulent transactions involving third-party platforms. Deputy Prime Minister Gan Kim Yong stated that the E-Payments User Protection Guidelines establish duties for financial institutions (FIs), such as cooling-off periods and real-time alerts. He clarified that FIs cannot disclaim responsibility solely by citing another institution's involvement and must investigate whether their individual obligations were fulfilled. The Monetary Authority of Singapore expects FIs to consider specific circumstances and customer responsibility when determining recourse for unauthorized transactions. Customers may seek mediation through the Financial Industry Disputes Resolution Centre if they disagree with the outcome of an FI’s internal investigation.
Transcript
1 Mr Gabriel Lam asked the Prime Minister and Minister for Finance whether clearer regulatory guidance can be issued to protect consumers by setting out (i) how liability is determined when fraudulent transactions involve third-party payment platforms such as digital wallets and (ii) whether banks can disclaim responsibility by attributing losses from fraudulent transactions to such platform interfaces.
Mr Gan Kim Yong (for the Prime Minister): Existing regulatory guidelines, such as the E-Payments User Protection Guidelines, set out duties for financial institutions (FIs) that operate bank accounts or issue personal payment accounts containing e-money (e-wallets), which, in turn, govern the responsibility for losses arising from unauthorised transactions. Examples of such duties include imposing a 12-hour cooling off period after a digital token is activated on a device or after a login to an e-wallet account on a new device and sending real-time transaction notification alerts.
When fraudulent transactions occur involving several FIs, like a bank and e-wallet provider, customers should report promptly to the involved FIs. The Monetary Authority of Singapore expects each FI to investigate the matter and consider whether its individual obligations were fulfilled and whether customers acted responsibly in the context of their individual account relationships with the FI. An FI may not disclaim responsibility solely by citing the involvement of another FI, and should consider the specific circumstances of each case.
Should customers disagree with the outcome of the FI's investigation, they may approach the Financial Industry Disputes Resolution Centre (FIDReC) for mediation and adjudication. FIDReC is an independent and impartial institution that provides a low-cost dispute resolution service for FIs and their customers. FIDReC will independently consider all available information and whether each party has fulfilled their responsibilities in determining recourse for customers.