To fight scams, banks and the authorities now have more control over customers’ accounts. How do we strike a balance between protection and overreach?

In Thailand, the cyber police announced in September that they would revise the criteria for freezing bank accounts after a public outcry from people whose accounts were locked despite having no links to scams. 

The country’s Cyber Crime Investigation Bureau said it had received numerous complaints from vendors and citizens who found their accounts frozen even though they had not allowed their accounts to be used as mule accounts.

In Singapore, despite the public consultation and news articles on the proposed framework, many were still caught off guard by the new powers given to banks and authorities. 

Associate Professor Hannah Yee-Fen Lim from NTU said it was likely that the consumers may have had “big picture knowledge” of the consultations, but may not be aware of the minute details.

When the Protection of Scams Bill was debated in Parliament in January, some Members of Parliament (MPs) reflected these concerns. 

Member of Parliament for Yio Chu Kang SMC, Mr Yip Hon Weng, said that while the measures were necessary and a timely step to address the scam crisis, it is also “highly intrusive” because it “removes personal agency” by restricting access to accounts. 

Mr Gerald Giam, Workers’ Party MP for Aljunied GRC, similarly said that while the Bill is an important step towards “combating this scourge”, it introduces a significant change to the legal relationship between banks and their customers.

Speaking to CNA TODAY, he said that to truly combat scams what Singapore needs is systemic safeguards such as real-time fraud detection for digital wallets, stronger “Know Your Payee” checks, and a centralised scam database.

Ms Tin Pei Ling MP for Marine Parade-Braddell Heights GRC meanwhile said that while the interventions are “swift and strong”, the devil is in the details when it comes to implementation and avoiding false positives which, if happen, could inconvenience users. 

Experts acknowledged that added checks and closer monitoring create more steps for customers and make banking less convenient, but at this point in Singapore’s fight against scammers, they are necessary given the magnitude of losses by victims.  

Mr Choon Hong Chua, who is a senior director at Moody’s which provides risk management data and analytics said: “This is a necessary evolution in managing systemic risk … it achieves a fine balance between providing necessary safeguards and maintaining customer convenience.”

As to whether these new moves remove an individual’s autonomy when it comes to managing their money, experts disagreed that they do, even if it might appear that way to some. 

They said that the new rules only give banks “just slightly more control” to serve as “preventive brakes” so it’s harder for funds to leave the jurisdiction, which would then be impossible to recoup.  

Even if consumers find their accounts frozen over flagged transactions, they still have control over their regular payments such as GIRO deductions, standing instructions, and transactions involving recognised billers, said Associate Professor Kelvin Law from Nanyang Technological University’s Nanyang Business School.

Associate Professor of Finance Mandy Tham from Singapore Management University (SMU) said that moves should not be viewed as paternalistic but more as a cultural shift towards prevention rather than reaction in financial regulation. 

She added that this was understandable given how digital risks associated with managing our wealth have risen. 

Singapore, in particular, has seen increased wealth among its ranks, the widespread adoption of digital banking, and an open financial system where money flows easily and quickly across borders.

“We are becoming more vulnerable to the digital banking risks resulting from a temporary lapse in judgment, at the current ease and speed of online transactions,” said Assoc Prof Tham.

“We would all agree that crimes are more easily detected and halted given a three-day window than a three-minute window.”

Senior Law lecturer Olivine Lin from Singapore University of Social Sciences (SUSS) said that the measures are aimed at the “common good”, rather than authorities and banks gaining more control over consumer accounts.  

“If you really want to protect the most vulnerable in society from losing their hard-earned money, perhaps the only feasible outcome is to adopt an approach that is somewhat paternalistic — to temporarily freeze their accounts for their own good,” said Ms Lin.

She said this approach might well be the easiest way to protect Singapore’s ageing population from falling victim to scams, given their low levels of digital literacy. 

As to whether age-based safeguards could be viewed as discriminatory, experts said there is always the risk of this happening when you “hard-code” age or demographic categories. 

Assoc Prof Kelvin Law’s suggestion for a fairer approach is to base interventions on behaviour rather than identity — for instance, by flagging unusual patterns such as sudden increases in transfer amounts, first-time payees, or transactions from unfamiliar devices or locations.