MAS to develop a framework for equitable sharing of losses arising from scams
In addition, MAS intends to develop a framework for the equitable sharing of losses arising from scams. Under this new framework, all parties be responsible for being vigilant and taking precautions against scams when they arise. This will provide added protection and security to the retail market in Singapore.
MAS currently chairs The Payments Council which, since July 2021, has been working to establish the equitable sharing of losses framework. The Payments Council was set up in 2017 to encourage collaboration between the users and providers of payment solutions and to make recommendations to MAS on payment-related policies.
The framework makes two assumptions:
- financial institutions are responsible for protecting their customers through robust controls that safeguard customer accounts and for implementing effective measures to detect and respond to suspicious transactions
- customers are responsible for taking the necessary precautions to protect their accounts, such as not divulging their personal or banking credentials and not clicking on fraudulent SMS or emails claiming to be acting on behalf of banks.
In a statement from MAS released on 4 February 2022, it was explained further that “MAS expects financial institutions to treat their customers fairly and bear an appropriate proportion of losses arising from scams. At the same time, care must be taken to ensure that compensation paid to customers does not weaken their incentive for all to be vigilant.”
MAS plans to publish the equitable sharing of losses framework for public consultation within the next three months. As part of the framework, customers are encouraged to use safe digital practices, such as:
- transactions should only be carried out on a bank’s official website, or through the bank’s official mobile application
- the close monitoring of transaction notifications received from banks so that any unauthorised payments can be identified as soon as possible
- keeping devices updated with latest security patches and anti-virus software.
You can read the full article published by MAS by clicking here. If you have any questions on payment-related solutions, please reach out to your usual Waystone representative or contact us below.