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The Ministry of Home Affairs (MHA) introduced the Fraud Prevention Bill in Parliament on November 11, 2024 for first reading. The bill empowers police to issue a restraining order (RO) to a bank to restrict an individual’s banking transactions if they have reasonable grounds to believe that the individual will transfer money to a fraudster.
background
The government has proposed the bill in response to the increasing number of fraud cases in recent years. The Ministry of Interior reported that the number of fraud cases increased almost five-fold from 2019 to 2023, from about 9,500 to about 46,600. In 2023 alone, fraud caused losses of approximately S$650 million. This is despite a suite of safeguards in place in partnership with banks to protect the public (including ‘Kill-Switch’, which allows customers to freeze their bank accounts if they suspect their accounts have been compromised, and ‘Money Lock’, where customers can keep an account ), money cannot be transferred from bank accounts online), and the number of fraud cases remains high. In the first half of 2024, 86% of reported frauds were due to self-transfers. The scammer does not directly control the victim’s account, but manipulates the victim into transferring funds to the scammer.
restraining order
The proposed bill aims to protect targets of ongoing fraud by empowering police to issue a restraining order (RO) to a bank to restrict an individual’s banking transactions if there are reasonable grounds to believe the individual will transfer money to a fraudster. The purpose is to protect individuals from losses caused by scammers.
In summary, the decision to issue an RO will be made by the police based on an assessment of the facts and circumstances of each case, including relevant facts provided by the individual or the individual’s family members.
If a police officer has reasonable grounds to believe:
- The individual will transfer money to the scammer; and
- RO is necessary to protect individuals. Issuing an RO should only be done as a last resort after other options of persuading the individual have been exhausted.
After the RO is issued, the following bank financing will be restricted:
- Transfers from bank accounts to other accounts (including via online banking, mobile banking, PayNow and in person at the counter);
- ATM facilities; and
- All credit facilities (e.g. credit card transactions, personal loan facilities).
Individuals may request access to their funds for legitimate reasons (e.g., to maintain daily living, pay bills). Police will assess such cases on a case-by-case basis.
ROs are valid for a maximum of 30 days at a time. Police can extend the RO by up to 30 days at a time, up to five times, if more time is needed to implement necessary interventions.
The Ministry of Home Affairs stated that the police will only issue ROs for fraud cases that are carried out remotely, that is, scammers use remote communications to interact with fraud victims to achieve the purpose of defrauding. This is to rule out traditional cases of cheating that involve face-to-face interactions, such as transferring to the wrong renovation contractor or to a family member or friend.
For more information, please visit the Home Office website.
The Prevention of Fraud Bill provides an additional tool that can be used to combat fraud in Singapore. By empowering police to restrict banking transactions of potential fraud victims, the bill enhances the safety of members of the public who may be targeted by fraud.
We view this effort by the Ministry of Home Affairs as part of the Government’s wider push for shared responsibility among the Singaporean public. This is in line with the Shared Responsibility Framework (SRF) (see customer alert here) due to be implemented from 16 December 2024, which will see both financial institutions and telcos take on relevant responsibilities to reduce phishing scams and protect users Protect yourself from scams.
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To find out more and discuss what this development may mean for you, please get in touch with your usual Baker McKenzie contact.
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