Banks 'unlikely' to pay phone scam victims

The OCBC Bank outlet at Marina Bay Financial Centre.
The OCBC Bank outlet at Marina Bay Financial Centre. PHOTO: ST FILE

Victims of phone scams who hand their money over to crooks impersonating bank staff are unlikely to be compensated, lawyers warned yesterday.

Last Monday, OCBC Bank reported a sharp rise in scams involving conmen impersonating its employees; around 30 customers are believed to have been duped, losing tens of thousands of dollars.

However, lawyers told The Straits Times that such victims would be liable for the money they lost due to the voluntary nature of the transactions.

"If they did so fully aware of the advice and warnings, then it becomes their responsibility," said Mr Rajan Supramaniam, a lawyer at Hilborne Law. "In helping with police investigations, the bank will provide all relevant information. But it will not compensate the victims for their losses..."

OCBC has lodged a police report about the scam and advised those who lost money to do the same.

All the banks advised their customers not to reveal personal details or confidential information, such as PIN numbers, over the phone. They also urged customers to check the legitimacy of the caller, by calling the banks' main lines.

DBS has also been affected, though POSB, Citibank, UOB and Maybank said they were not aware of any phone scams in which their staff were impersonated.

All the banks advised their customers not to reveal personal details or confidential information, such as PIN numbers, over the phone. They also urged customers to check the legitimacy of the caller, by calling the banks' main lines.

Mr Supramaniam explained to customers who have been cheated that the starting point for seeking legal recourse is to make a police report. "They can also pursue the issue with the bank, by going through a lawyer," he added. "I have handled cases involving a wrong transfer of money."

Mr Shashi Nathan, a partner at WithersKhattarWong, said that seeking compensation from the bank depends on the facts of each case. "The bank might have a protocol to check before any transactions are made, usually for larger amounts. Failure to follow such protocol means the bank was negligent to the customer, and the victim can make a claim for negligence."

He also explained that the bank and police both have to trace where the money went, and find the origins of the soliciting of information.

"Criminals these days are very sophisticated, and most of the time they are based outside of Singapore," said Mr Nathan. "It is especially hard to track due to the multitude of transactions."

A version of this article appeared in the print edition of The Straits Times on July 25, 2016, with the headline 'Banks 'unlikely' to pay phone scam victims'. Print Edition | Subscribe