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Singapore’s Ministry Of Home Affairs (MHA) has announced plans to introduce a Protection from Scams Bill intended to safeguard individuals at risk from online fraud.
Published on August 30, the bill is designed to empower the Singapore’s police to issue so-called restriction orders (ROs) to banks.
The legislation is highly interventionist, and will allow banks to temporarily restrict banking transactions for individuals who are targets of ongoing scams but refuse to believe they are being deceived.
Since 2022, banks in Singapore have implemented various measures to protect customers from scams, including the "kill-switch," which allows customers to freeze their accounts if they suspect fraud, and "money lock," where funds can be set aside and protected from online transfers.
Despite these safeguards, the incidence of scams involving victims voluntarily transferring money to fraudsters remains high.
In the first half of 2024, for example, 86 percent of reported scams in the city-state involved authorised push payment (APP) scams, whereby victims were manipulated into willingly giving money to scammers.
Often, these individuals were warned by the authorities such as the police and banks, as well as family members, about the potential scam risk, but chose to proceed with the transactions anyway.
Currently, the police lack the authority to stop these transactions if the victim insists on making them.
The proposed Protection from Scams Bill aims to fill this gap by granting the police the authority to issue ROs in specific circumstances.
These ROs would allow banks to suspend certain transactions and credit facilities to prevent further financial losses.
They will be applicable only to scams conducted entirely through digital or telecommunication channels, such as online communications or phone calls, where there has been no in-person interaction.
Cases involving face-to-face interactions, meanwhile, such as disputes with contractors or family members, will not be covered by this legislation, with the MHA stating that these situations often do not immediately disclose a criminal offence, rendering police intervention unnecessary or impractical.
What will this legislation entail?
Under the proposed legislation, the ROs would temporarily suspend all money transfers from the victim’s bank accounts, whether conducted online, via mobile, or in person, to prevent funds from reaching the scammers.
A mechanism will be put in place to allow individuals to access their money for essential needs, such as daily living expenses and bill payments.
Additionally, all credit facilities, including credit card transactions and personal loans, would be suspended to prevent scammers from persuading victims to apply for loans on their behalf.
If a RO is deemed necessary, it will be issued to all seven of Singapore’s Domestic Systemically Important Banks (D-SIBs) to ensure comprehensive coverage across all the victim's accounts.
The initial duration of the ROs will be 28 days, giving the police time to engage with the individual, gather additional evidence, and take further measures to prevent the scam.
If the risk persists, the RO can be renewed in 28-day increments, with ROs only being issued as a last resort, after all other attempts to persuade the individual have failed and if there is credible evidence that the person is at imminent risk of falling victim to a scam.
Individuals subject to an RO will have the right to appeal the decision to the MHA, and the departmental minister’s ruling will be final.
The MHA is seeking public input on the proposed bill and welcomes any suggestions or concerns, with a deadline of September 30.
