Consumer-institution financial disputes hit record high

The number of claims handled by a financial dispute resolution body hit a record high in 2025, with most involving scams and fraud.

This marks a major shift from the insurance- and investment-related claims that traditionally formed the bulk of work at the Financial Industry Disputes Resolution Centre (Fidrec), which has handled disputes between consumers and financial institutions, such as banks, since 2005.

There were 2,646 claims made by consumers in the financial year that ended in June, said Fidrec in a statement on Sept 24.

Of these, 49 per cent involved scams and fraud, followed by 25 per cent relating to the practices and policies of financial institutions, which include contractual agreements between the consumer and institution.

Market conduct, which refers to practices like mis-selling or misrepresentation, came in at 15 per cent.

The most common scam type Fidrec has handled involves compromised user credentials, said Fidrec chief executive Eunice Chua during a media briefing on Sept 24. In such cases, login information is stolen from users via phishing and malware, which allows scammers to access bank accounts and e-wallets.

An increasingly common tactic is scammers linking stolen card details to their e-wallets, said Fidrec, adding that victims often miss initial notifications about this.

“When people file a complaint with us, they often are not able to pinpoint how their credentials were lost, stolen or compromised,” said Ms Chua.

“They are not able to say that it was because they clicked on a phishing link, or they are not aware that it was due to malware. So, from their perspective, it is as if they wake up one day and realise all these transactions were not done by them.”

Impersonation scams, where scammers pose as figures such as bank and government officials, are also common and often involve a large part of a consumer’s savings, said Ms Chua.

A total of 1,504 government official impersonation scams were reported in 2024, and an average of $100,622 was lost per case, according to the annual scam figures released by the police in February.

This was the highest amount of money lost per case on average in 2024, compared with other scam types such as investment or social media impersonation scams.

Scam and fraud cases began to spike noticeably after the Covid-19 pandemic started in 2020 as people became more used to online services such as digital banking, said Ms Chua.

This rise can also be attributed to other factors such as the proliferation of transnational scam syndicates, introduction of instantaneous fund transfers and notification fatigue.

“There are a lot of notifications we receive from digital payments, while banks also rely on them to warn us of fraud and scams,” said Ms Chua, adding that this had led to a phenomenon where customers claimed not to have received a certain notification, only to realise later that they did.

“Even if they did receive the message, they just skim through and don’t read the full contents of the message, which is common especially for one-time password notifications.”

The last time Fidrec experienced a surge in cases was in the financial year ending 2009, after the global financial crisis struck in 2008. The resolution body handled 2,257 claims then, of which nearly 90 per cent involved market conduct, and scams made up less than 1 per cent of claims.

Figures dropped thereafter and remained stable at around 964 claims on average per financial year before climbing sharply from 2021.

Said Fidrec: “(We) expect this upward trend to continue, with the number of scam-related disputes projected to continue rising, as digital banking and online transactions become even more deeply embedded in Singapore’s financial landscape.”

The organisation noted some structural challenges in seeking redress for consumers. These include the difficulty of clawing back funds once they are transferred out, especially from digital wallets.

Another limitation is that the Shared Responsibility Framework currently covers only phishing scams, although it is a positive step in clarifying what responsibility consumers and financial institutions bear, said Ms Chua.

The framework, which was jointly launched by the Infocomm Media Development Authority and the Monetary Authority of Singapore in 2024, outlines the duties that financial institutions and telcos must fulfil. This helps to establish who pays the bill for phishing scam losses.

“As the scope is so limited, and many people who come in cannot identify the reason for them being scammed, (the framework) is not commonly used by Fidrec,” said Ms Chua.

Fidrec’s advice to consumers is to be more careful with their login credentials and be proactive in setting up protective measures such as multi-factor authentication, she added.

“That would be our top wish for consumers, so that they can safeguard themselves.”

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

NTUC calls for companies to be ‘transparent and fair’ in AI adoption, share gains with workers