SINGAPORE: Setting a lower value of $50,000 for banks to block or hold transactions as part of their duty to monitor fraud “could generate too many false alarms” and cause inconvenience to most banking customers, it said Minister of State for Trade and Industry, Alvin Tan. parliament on Tuesday (November 12).

Mr Tan was answering questions about the shared responsibility framework for phishing scams, which he will do starts on December 16th.

The framework, first proposed in early 2022, seeks to prescribe how losses resulting from phishing scams will be shared among financial institutions, telecommunications companies and consumers. It lays out specific duties for companies, making them liable to pay if they have failed to fulfill their responsibilities.

The finalized framework includes an additional obligation for banks to conduct real-time fraud surveillance to “detect if a customer’s account is rapidly depleted of a material amount” due to a phishing scam.

An account would be considered rapidly depleted of a significant amount if it had an account balance of $50,000 or more immediately before the unauthorized transaction and if more than half of the account balance was transferred in the previous 24 hours.

When this happens, the financial institution must either block the suspicious transaction until it can obtain additional verification from the customer, or notify the customer while holding the transaction for at least 24 hours.

Responding to questions about how the $50,000 threshold was determined, Mr Tan noted that authorities “need to strike a balance between protecting customers and inconveniencing consumers conducting legitimate transactions”.

“Setting a lower value could generate too many false alerts and lead to inconvenience for most customers,” he said.

However, banks are expected by the Monetary Authority of Singapore (MAS) to consider other factors in fraud surveillance. These include a customer’s profile and potential vulnerability to scams, as well as spending patterns.

“These go beyond what is set out in the (shared responsibility framework),” said Mr Tan, who is a MAS board member.