SINGAPORE: In the discussion on digital safety in Parliament on Wednesday (Jan 10), Workers’ Party MP Jamus Lim said that the victims of digital scams should only bear a maximum of S$100 to S$500 in losses, with the rest being shouldered by banks and telecommunications companies.
The Sengkang GRC MP said this in the context of discussing the Shared Responsibility Framework (SRF) for phishing scams proposed by the Monetary Authority of Singapore (MAS) and Infocomm Media Development Authority (IMDA) last October.
The SRF says that banks and telcos that breached their duties of mitigating phishing scams must reimburse scam victims. However, if banks and telcos are found to have fulfilled their duties, the full burden of the scam falls on the victim.
In his speech, Assoc Prof Lim called the framework “fundamentally unfair,” given that financial institutions are not only larger but have greater power. This is why the government needs to empower citizens with a “more robust set of laws that offer financial protection to consumers,” he added.
Such laws would cause financial institutions to take more care to monitor and catch phishing and fraudulent schemes since they would have to bear a share of the losses incurred. They would also have a stronger incentive to run after transfers made to suspicious counterparties and “no longer condone unauthorized purchases made with ill-gotten money.”
Assoc Prof Lim compared the situation to co-payments with insurance plans. If scam victims are required to “absorb at least some reasonable amount of loss” of S$100 or S$500, they would be motivated to practice good cyber hygiene and so they would not get easily scammed.
And while he acknowledged that the loss-sharing framework proposed by the government is a measure toward helping establish liability for financial fraud, he does not believe that it fulfils its promise of being “fair.”
Like his fellow WP MP Sylvia Lim (Aljunied GRC) he noted that there has been a “ a steady erosion of trust in digital transactions, one that—if not addressed expeditiously—could result in a crisis of confidence over online payments and digital finance.”
One vital step toward rebuilding trust makes it necessary for financial institutions and telcos to absorb losses, with consumers shouldering only a maximum of S$500 when scams occur.
“This will not only be fair but will help evolve the system into a more robust one,” he added.
Watch Assoc Prof Lim’s speech in full here. /TISG