Singapore proposes world-first law to freeze bank accounts of scam victims

With the scam situation getting worse here each year, the authorities are now preparing to take some intrusive measures to combat the scourge.

With the Protection from Scams Bill introduced in Parliament on Nov 11, Singapore may soon be the first in the world to give the police powers to control the bank accounts of stubborn scam victims, who insist they are not being scammed even though the evidence says they are.

The Bill proposes allowing the police to issue restriction orders (ROs) to banks which will then restrict the banking transactions of an individual’s accounts.

These include money transfers, the use of ATM facilities and all credit facilities, affecting even PayNow and in-person over-the-counter transactions.

The police have said one of the biggest challenges they face is convincing people that they are victims of a scam.

The police currently cannot stop a victim from doing what he wants with his money, even if he is suspected of being scammed.

Scam numbers hit record highs in the first half of 2024, with more than $385.6 million lost in 26,587 reported cases.

If the Bill is passed, police officers may issue an RO to a bank if they believe the victim will transfer money to the scammer, or if it is necessary to protect the victim.

It will be issued by default to the seven major retail banks here, which are OCBC, DBS Bank, UOB, Maybank, Standard Chartered, Citibank and HSBC, but can also be issued to other banks.

ROs will take effect for up to 30 days at a time, but can be extended up to five times, which means they can last up to six months.

The police can cancel an RO ahead of the 30-day limit if the individual is assessed to be no longer at risk of being scammed. Appeals against the RO can be made to the Commissioner of Police whose decision will be final.

The ROs will be issued for only scam cases which involve cheating done largely through digital and telecommunication channels like calls and SMSes.

It will not cover traditional cheating cases typically involving in-person interactions like those with errant renovation contractors or family members and friends.

The Ministry of Home Affairs (MHA) said the RO will be issued only as a last resort, after other options to convince the scam victim have been exhausted.

Based on previous cases in which the police were unsuccessful in intervening, MHA said 10 or more ROs could be issued monthly.

It added that individuals subjected to an RO will still have access to money for legitimate reasons like paying bills and buying daily essentials like groceries.

They can apply to the police for access to a fixed amount of money, and can apply for access to more by showing proof such as their bills.

In a speech at the police’s Clementi Division Roadshow 2024 on Nov 10, Minister of State for Home Affairs Sun Xueling said Singapore is losing some $2 million to scams daily.

Numerous anti-scam initiatives have been introduced in recent years, including the “I can ACT against scams” campaign launched in 2023 by the National Crime Prevention Council and Singapore Police Force.

The banks here have also introduced a kill switch to allow customers to freeze their bank accounts if they suspect that their accounts are compromised, and money lock for customers to set aside money that cannot be transferred out of their bank accounts via online means.

Despite all these measures, 86 per cent of all reported scams in the first half of 2024 involved victims making voluntary transfers to scammers.

In these cases, the scammers did not have direct control of the accounts, but manipulated the victims into making the transfers.

Some of these victims were told by the police, banks and family members they were being scammed, but still insisted on making the transfers.

Many of such scams were investment or impersonation scams, involving large sums of money.

The idea for a more intrusive approach to tackling scams by the authorities was first revealed in August, when MHA said it was mulling over whether police officers should be given the powers to temporarily freeze bank accounts so they had more time to convince victims they were being preyed upon.

MHA said a public consultation on the Bill was conducted via the Reach website from Aug 30 to Sept 30 and through focus group discussions with representatives from the various age groups.

Over 90 per cent of respondents were supportive of the Bill and provided suggestions and feedback which were taken on board where appropriate.

Some felt individuals should bear responsibility for their own actions instead of having the government intervene in such personal decisions, and others were concerned about the new powers being intrusive and abused.

There were also suggestions for the scope of the RO to be expanded to include cryptocurrency exchanges and remittance companies, with MHA saying it will consider if this is necessary in the future.

MHA said: “While the government will continue to step up our efforts, everyone must play their part to keep scammers at bay.”