Mr Prakash Kumar Hetamsaria was in India two years ago when he was alerted to an article on alternative news site All Singapore Stuff.
Mr Hetamsaria, who became a Singapore citizen in 1999, was taken aback to see his photograph appearing with the article, "S'pore new citizen feels cheated, now wants his old citizenship back".
While he went on social media to clarify that the article and his photo were not linked, he and his wife and young daughter found themselves on the receiving end of xenophobic comments from strangers who did not find out the facts, he said.
"I should do my part but, at the same time, we should have been protected by some kind of legislation," Mr Hetamsaria, the chief financial officer of a trading firm, told the Select Committee on deliberate online falsehoods yesterday.
He made a police report, but was told only a few months later that the matter could be addressed in civil court if he wished to pursue it.
While posting a rebuttal online helped to stop the spread of the falsehood - his photograph was removed from the website - more should be done, he added.
In his written submission, Mr Hetamsaria, a grassroots leader, suggested that websites which are potential troublemakers should be identified.
If found to have published falsehoods, they should first get a warning. They should be fined if they do it a second time, and shut down if it is the third time, he said. He also urged the public to be proactive in verifying news stories.
Appearing before the committee with him was Mr Raja Mohan, chief programme officer of a voluntary welfare organisation, who highlighted the need for media literacy as well.
This is especially so for elderly citizens, who may pass on false messages unknowingly, he said.
Separately, he also called for regulations making it compulsory for people who pay for political advertisements to declare their identities.