MAS, banks to tighten GIRO safeguards after double-charging incidents

Source: Straits Times
Article Date: 09 Apr 2026
Author: Sheila Chiang

The review will consider measures including enabling customers to set monthly limits on the amount and number of transactions.

The Monetary Authority of Singapore (MAS) is working with the Association of Banks in Singapore (ABS) and banks to strengthen safeguards in using GIRO, said Minister of State for National Development Alvin Tan.

The review will consider measures including enabling customers to set monthly limits on the amount and number of transactions, as well as enhancing transaction monitoring and due diligence on billing organisations, he said in Parliament on April 8.

Mr Tan, who is also Minister of State for Trade and Industry and a board member at MAS, said GIRO customers can now set transaction limits on GIRO payments and banks will apply due diligence checks on GIRO billing organisations, but such checks are not always error-proof.

“Checks by banks may not always be able to prevent errors and potential misuse of GIRO. While such cases have been uncommon so far, we agree that the safeguards should be strengthened,” he said.

Consumers are advised to review their current GIRO arrangements and to set appropriate transaction limits with their financial institutions, he said, adding that there are other non-GIRO payment options available, including standing instructions to the bank for recurring monthly payments.

He was responding to questions raised by Ms Gho Sze Kee (Mountbatten), Mr Shawn Loh (Jalan Besar GRC) and Mr Melvin Yong (Radin Mas) on issues faced by GIRO users.

Ms Gho’s question pertained to the issues with GIRO deductions faced by parents following the closure of a student care chain in February. She asked about existing safeguards within the GIRO framework to prevent duplicate or erroneous debits and whether the Ministry of Finance would review the framework to strengthen consumer protection, including mandatory pre-debit notifications and consumer-set limits on variable deductions.

Several parents discovered they had been charged twice via GIRO deductions for their children’s February fees by student care centres run by Little Professors Learning Centre. The student care provider’s services were terminated by Ministry of Education in February after multiple reports of unpaid staff wages and police reports filed by parents over anomalies in GIRO deductions.

Ms Gho cited the Bankers’ Automated Clearing System in the United Kingdom, a direct debit scheme that includes advance notice of payment amounts, allowing for immediate refunds in case of error and other strong consumer recourse mechanisms.

She asked whether Singapore’s review of the GIRO framework would move towards incorporating similar safeguards found in other countries.

Noting Ms Gho’s suggestion, Mr Tan said that some of the banks here offer GIRO on demand, where each deduction must be authorised individually before the bank processes the transaction.

“Different banks have different ways of which to either implement safeguards or have different safeguards. But we will look into that suggestion,” he said.

Mr Loh asked whether MAS would consider requiring banks to allow customers to set optional limits on the number or cumulative amount of deductions per billing period for individual GIRO arrangements, so as to improve customer control against bad actors or technical failure in company payment systems.

This is in addition to the limits-per-transaction for GIRO deductions and safeguards against scams, he said, adding that the current level of consumer protections is inadequate.

He asked if MAS would increase public awareness of the protection offered to consumers as well as its limitations while the review is ongoing.

Mr Tan said: “MAS will work with the banks as well as financial institutions to raise public awareness and for the review, we will start with the low hanging fruit. Some of these may be effected in the short term, but major enhancements which involve system changes will need some time to be developed, tested and implemented.”

Meanwhile, Mr Yong asked about due diligence checks that banks are required to conduct when taking on a corporate customer for GIRO billing as well as whether banks are required to have suspicious transactions alerts when a billing organisation deducts multiple GIRO transactions from a customer in a short time span.

“We often use GIRO when we want to, so-called, set and forget recurring payments. Therefore, we acknowledge that while there is convenience of using GIRO, it also comes with a trade-off, including the possibility of fraud. And many consumers regard GIRO as a secure and convenient means of payment, and therefore we must put in place the necessary safeguards,” said Mr Yong, who is also president of the Consumers Association of Singapore.

The consumer watchdog previously said that it received 10 complaints relating to unauthorised GIRO deductions from Jan 1, 2025, to March 16, 2026.

Responding, Mr Tan said GIRO has its uses and offers convenience for things like monthly electricity bills, which fluctuate from month to month.

“But there are also some downsides. That is why this review will take into account what Ms Gho and Mr Loh have suggested, and that includes enhanced monitoring of transactions.”