MAS releases safety guidelines for electronic payments

Rules apply to both users and financial institutions – including insurers and intermediaries

MAS releases safety guidelines for electronic payments

Insurance News

By Gabriel Olano

The Monetary Authority of Singapore (MAS) has released guidelines to protect users of electronic payment systems from fraud, errors, and security threats.

The guidelines, which are part of Singapore’s push to lessen dependence on cheques and cash, will be effective January 31, 2019, and will cover both customers and financial institutions such as insurance companies, banks, and their intermediaries, Straits Times reported.

Customers are required to update their contact information, observe transaction notifications to detect any dubious activities, and practise good security measures, the guidelines stated. These security measures include updating the software in their computers and mobile phones, including anti-virus software.

In case a user spots an unauthorised transaction, they must report it immediately and cooperate with the financial institution and relevant government authorities.

Meanwhile, financial institutions must investigate all claims quickly, and produce a detailed investigation report within 21 days for straightforward cases, and 45 for more complex ones.

If the financial institution is found at fault for the erroneous transaction, it will be held liable for the full amount. If third parties were behind the incident, the financial institution will be held liable for cases worth SG$1,000 and below. In cases exceeding that amount, it will be judged on a case-to-case basis.

MAS recently held a month-long public consultation with 21 respondents, including the Association of Banks in Singapore (ABS) and the Singapore Fintech Association, represented by law firm Linklaters Singapore.

ABS expressed concern over whether new rules could result in cases where liabilities of users and financial institutions were not commensurate with their responsibilities.

The association cited an example where fraudsters may engineer unauthorised transactions in which the end-user is still deemed to be innocent. In such cases, financial institutions could end up taking the brunt of the blame.

According to ABS’s current Credit Card Code, cardholders are fully liable if they are involved in fraud or acted with gross negligence.

MAS responded, saying it studied the feedback carefully and considered the duties of financial institutions to protect users from losses they are not responsible for. It revised the guidelines, clarifying that financial institutions will shoulder the loss if the unauthorised transaction is due to their action or omission.

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