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The Monetary Authority of Singapore (MAS) and Infocomm Media Development Authority (IMDA) have introduced the Shared Responsibility Framework to outline how responsibility for certain phishing scam losses which have a "digital" and "clear Singapore" nexus will be shared among relevant stakeholders. Such stakeholders are defined to be financial institutions, such as banks (FIs), telcos and consumers.
Key rationales outlined by the MAS and IMDA are to preserve confidence in digital payments and banking in Singapore and to strengthen FIs' direct accountability to consumers from losses incurred from digital scams where they should assume responsibility.
The main thrust of this framework is embodied in the "waterfall approach", which is a multi-layered approach involving a responsible FI as the first layer of accountability: if it has breached any of its stated duties, such as sending outgoing transaction notification alert(s) on a real-time basis, it is expected to compensate the consumer fully for the loss incurred by the customer.
The MAS and IMDA proposed this framework after considering the approaches from the UK, EU (Germany and France) and Australia. It is expected to come into effect by this year.
Singapore
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The Hong Kong Monetary Authority (HKMA) has updated its guidance in recent years relating to payment cards, e-banking and bogus phone calls, requiring banks to implement additional security measures and monitoring, and enhance customer communication, education and support. In particular, with regard to unauthorised payment card transactions, banks are expected to take into account the actual circumstances, limitations and practical difficulties faced by the cardholder in protecting himself/herself against frauds and scams, as well as other factors relating to the cardholder, when considering the losses they propose the cardholder to bear. Banks are also expected to adopt a pragmatic and sensitive approach towards cardholders who report unauthorised transactions, be transparent about the investigation process and the results, and provide an appeal mechanism for cardholders.
Over 230 financial institutions and merchant institutions are part of the Anti-Scam Consumer Protection Charter, in which they commit to four key principles to assist the public to guard against credit card scams and other digital frauds, including phishing messages.
Hong Kong
As Australia moves towards the introduction of mandatory industry codes to outline the responsibilities of the private sector in relation to scam activity, the initial focus is on banks, digital communication platforms, and telecommunications providers. Banks in Australia and other jurisdictions will need to understand both their own role (in the whole-of-ecosystem approach needed to combat scams) and how that role fits in with that of other participants. Moreover, they will need to keep up with the ever-evolving modus operandi of scamming operations and learn from what is working well (or not so well) in other jurisdictions. Agility, collaboration and significant investment are needed to navigate the complexity and challenges of this landscape.
Australia
In the UK, scam activity is on the rise. The Financial Ombudsman Service quarterly report in September 2024 confirmed that "fraud and scam complaints are at their highest ever quarterly level". According to this report, scam activity is largely focused on online bank transfers.
One response has been to force banks and other payment services firms to reimburse customers. As of 7 October 2024, UK Payment Service Providers (PSPs) will be required to reimburse victims of authorised push payment fraud made under the faster payments system. This new mandatory requirement was introduced by the Payment Systems Regulator (PSR) via a policy statement and a number of legal instruments. The new regime not only protects consumers. It also incentivises PSPs to implement effective fraud prevention measures.
New reimbursement rules have also been introduced by the Bank of England for CHAPS payments from the same date. PSPs participating in CHAPS will be required to reimburse victims of CHAPS scams in accordance with the new PSR requirements.
United Kingdom