Over 500 scam victims filed claims in bid to recover losses from banks 2024-01-07

Over 500 scam victims filed claims in bid to recover losses from banks 

https://www.straitstimes.com/business/invest/over-500-scam-victims-filed-claims-in-bid-to-recover-losses-from-banks

2024-01-07

Tan Ooi Boon 

Invest Editor

The Straits Times

The scams that continually plague people here have resulted in a whooping increase in claims filed against banks as some victims seek to recover their losses.

The Financial Industry Disputes Resolution Centre (Fidrec) received 509 fraud-related claims that were mostly filed against banks from July 2022 to June 2023 alone – a 95 per cent jump from the 261 cases heard in the same period in its previous financial year.

The scams were not new yet the victims still fell for them because many failed to take note of the regular and widely publicised police advisories.

For instance, about 130 of the victims were duped by impersonation scams, 160 keyed in their banking details on fake websites or apps, and around 20 people were sucked in by “lucrative” investment frauds.

Most of the claimants benefited from the free mediation service by Fidrec, which helped 66 per cent of them receive goodwill settlement offers from banks.

That said, you should not view such offers as a blank cheque to be cavalier in your banking habits because most settlement offers come in the form of partial waivers of a victim’s losses, especially those involving the fraudulent use of credit cards.

All these victims still suffered the bulk of the losses, which could have been prevented if they were diligent in following prevention tips, such as ignoring dubious social media ads and ensuring that the sites were genuine before keying in account details.

Fidrec chief executive Eunice Chua says: “We want to remind all consumers to remain vigilant against scams and avoid clicking on unsolicited links, downloading any unofficial apps, or sharing their account information or passwords with anyone.”

You should take note of the lessons highlighted in these two scam cases that were heard by the centre recently.

Dubious ads in Facebook 

A professional in her 50s responded to a Facebook ad that offered cheap pet grooming services and was told to download an app where she could book and pay for the service.

As she keyed in the details for her credit card with Bank A, she received a prompt from the app stating that her card was “invalid”. Thinking the system could not read this card, she used two other cards but still received the same “invalid” messages.

As she could not complete the transaction, she messaged the merchant that she would pay on the day of her appointment. She still did not know then that she had been duped into downloading a malware that enabled the scammer to copy all her card details and to hack her phone to read or delete all the bank messages.

She only discovered that she had been scammed when an e-mail from one of the banks told her that her card was being used. She immediately reported the fraudulent transactions through two of the banks’ mobile apps.

As she did not have an app for Bank A, she took some time to contact it. As a result, the bank failed to get a reversal of the $2,000 that was charged and paid out by the merchant’s bank.

As the bank denied her request for a waiver of this amount, she filed a claim at Fidrec. She noted during mediation that she delayed reporting to Bank A because she was busy stopping the transactions with two other banks.

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The woman eventually spent about an hour with Bank A’s hotline operator because she was not aware that the scammer used the malware that she downloaded to approve transactions with the one-time passwords that were sent to her by SMS, which made the payments final.

The bank noted that she should not have downloaded apps from an unknown source because the police had warned the public repeatedly about such scams.

As the customer put in some effort to report the case as soon as possible, Bank A offered to waive 25 per cent of the charges and she accepted it.

Points to note: You should never download apps from unofficial channels. If you suspect that your phone has been compromised, switch to flight mode immediately and contact your banks.

It is prudent to learn how to raise a dispute using online banking or the official mobile apps for the banks you transact with.

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Fake delivery charge

Most delivery charges are either paid or waived by the platform owners the moment you complete your orders. Still, many people continue to fall for fake delivery scams that are unrelated to any of their orders.

In this case, the victim clicked on a link in an SMS and was directed to a website where he keyed in his credit card details to pay a $2 fee. Two days later, he saw SMS messages that five overseas transactions of between $2,000 and $5,000 had been charged to his credit card.

The first three transactions were made a minute apart; the last two took place an hour later.

The man reported the fraudulent charges immediately. Investigations showed that the scammer had added the credit card to a mobile wallet and this was used to make the transactions.

Although the customer recalled receiving an SMS regarding mobile enrolment, he did not report this.

During a hearing at Fidrec, the adjudicator noted that the customer should bear most of the losses since he keyed in his card details without checking. Also, he did not alert the bank when his card was added to a mobile wallet.

But the adjudicator considered recent Monetary Authority of Singapore calls to banks to put robust measures in place to prevent and detect scams and noted that this case should have thrown up red flags as the customer only used his card for transactions below $100 locally and never for purchases in foreign currency.

As a result, the bank had to share the losses for the last two transactions, which took place later, while the customer had to pay for the first three.

Points to note: You should not click on links in messages. Always check the domain name of the website to ensure that it belongs to a legitimate entity before you key in your details.

Pay attention to bank alerts closely so that you can quickly detect a scam to minimise your losses.

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Despite the almost daily reminders of scams, it is bewildering why so many people continue to fall for the same tricks.

One possible reason is that these victims don’t have the habit of reading news. Ironically, they would be quick to alert newsrooms the moment they are scammed, even though doing so would not help them to recover their money.

So here are three resolutions to make for the new year.

1. Keep up to date with the news because it pays to gain knowledge and information that can help you, your career and your family.

2. Don’t respond to ads from unknown merchants on social media, unless you have checked and know that these are from genuine businesses.

3. Never be tempted by good deals, free gifts and sure-win investments. If these are genuine, the advertisers would reserve these for their loyal customers and not offer them to strangers like you.

Always remember that when it comes to money, you are your best hope in keeping it safe.

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