The Monetary Authority of Singapore (MAS) recently released guidelines, effective 31 January 2019, on what steps consumers and financial institutions (FIs) should take to protect themselves for e-payment transactions, and how liability for fraudulent transactions should be apportioned.
In the wake of the ever-growing number of online fraudulent transactions, MAS has released a much-needed set of guidelines to provide a common baseline of the respective duties of consumers and FIs in e-payment transactions.
The duties of consumers include the following:
On the other hand, FIs are responsible for the following:
Importantly, the guidelines have set out the instances where the consumer or FI would be deemed liable to bear the losses from the unauthorized transaction:
Consumer is liable when
FI is liable when
Finally, the guidelines also provide that if a consumer mistakenly transfers monies to the wrong recipient, the FI of transferor and the recipient must make reasonable efforts to assist the transferor in recovering the monies. These include informing the recipient of the wrongful transfer and asking the recipient for instructions to return the monies.
On the whole, these guidelines are a step in the right direction in terms of clarifying the duties and obligations for both consumers and FIs. Previously, FIs may have had similar standards in place, but these standards would have varied from organization to organization, and may not have been publicly made known to the consumer. With the publication of these guidelines, consumers have a clearer idea of what to expect when dealing with FIs when they are victims of a fraudulent transaction. For FIs, these guidelines provide a useful reference point that they can direct consumers to in order to show that the FI is not handling the consumer’s situation in an arbitrary manner.
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*A solicitor of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan, Lewis & Bockius LLP