Credit card issuers such as banks have invested considerable resources in building fraud surveillance systems and controls to combat card fraud, and these systems have been enhanced over the years in response to changing technologies and methods used by fraudsters.
At the same time, consumers have a part to play in fraud prevention, such as making a timely report to their bank should they lose their credit card, Transport Minister Ong Ye Kung, who is a board member at the Monetary Authority of Singapore (MAS), told Parliament yesterday.
The minister was responding to a parliamentary question from Associate Professor Jamus Lim (Sengkang GRC), who asked if the Government has considered encouraging more widespread wholesale insurance for banks and other credit card issuers.
Given the rise in fraudulent credit card transactions, this would permit easier write-offs for relatively smaller transaction amounts, Prof Lim said.
Mr Ong said there is little demand from credit card issuers to purchase insurance to cover fraud-related losses arising from their credit card portfolios.
"Instead of insurance which will lead to higher costs for consumers, it is more important for credit card issuers and customers to play their respective parts in preventing fraud."
He noted that major banks share fraud trends with one another, enabling them to continually refine fraud rules to tackle the latest fraud techniques.
"A timely report will cap a customer's liability at $100 unless he is subsequently found to have acted fraudulently or negligently," said Mr Ong.
"For online payments, customers should not disclose credit card details or one-time PINs to anyone and should practise strong cyber hygiene, such as by regularly updating the security patches and anti-malware software on their devices."
He noted that in cases of unauthorised payments to merchants not secured by a one-time PIN, banks have the right to fully recover the lost amount from the merchants, and customers will not have to bear any losses.
"We will continue to monitor the fraud situation and ensure that banks do their part to provide their customers with clear steps to take in order to protect themselves from such losses," added Mr Ong.
Prof Lim also asked if MAS has considered other forms of regulation that would shift the burden of responsibility away from consumers and their cyber hygiene, and towards better deployment of fraud detection technology by financial institutions, which should be held more liable for fraud-related losses.
Mr Ong said there is a system in place that strikes a balance between the liability of banks and consumers.
"For consumers, so long as you are not negligent, you're responsible and report it quickly - the losses they suffer are very much minimised," he reiterated.
The minister added: "We are all plagued by these cybercrimes and scams... We'll continue to have to strike a balance, educating and protecting consumers, but also to be fair to banks and the industry. This is something that's evolving, and we'll continue to work on it."
Mr Ong noted that a code of practice for banks on credit cards issued by the Association of Banks in Singapore sets out the liability of card holders under various circumstances, and that it is currently being reviewed to consider both emerging fraud scenarios and further risk mitigation measures.
