Everyone is Susceptible to Scams 
A colleague, highly experienced in the payments industry, recently fell victim to a rental scam. Despite reviewing agent credentials and landlord ownership records, she was deceived into transferring the equivalent of two months' rent to an incorrect account, a common scam in Singapore’s rental market. The inability to verify that the landlord’s name in the tenancy agreement matched the name on record of the bank account was key to the fraud's success. To stop scams like this, interventions must break the trust-building cycle that scammers exploit. One promising solution is verifying the account details of the recipient before payments are made.

Rising Scam Losses in Singapore 
Despite efforts to curb scams, Singapore’s financial losses continue to rise. In the first half of 2024, scam-related losses reached SGD 385.6 million, a 24.6% increase from the same period in 2023. The number of scam cases also rose, hitting a record high of 26,587. The biggest contributors to these losses were investment scams (SGD 133.4 million), government impersonation scams (SGD 67.5 million), and job scams (SGD 86 million), which together accounted for 70% of total losses.

Authorised push payment (APP) fraud, where victims are manipulated into transferring money, is particularly prevalent. To counter this, there’s a need for interventions that can disrupt the trust scammers build with victims. Breaking this cycle is critical, especially as the average losses for investment, impersonation, and job scams are substantial—ranging from SGD 15,055 to SGD 116,534.

Are We Merely Shuffling Deck Chairs? 
Singapore has deployed several anti-scam measures, including public education campaigns, cooling-off periods for transfers, kill switches, and money locks on bank accounts. Law enforcement agencies work closely with banks to monitor suspicious transactions, and SMS white-lists now identify messages as potential scams. The introduction of a Shared Responsibility Framework (SRF) has placed some liability on banks and telcos when they fail to properly discharge duties like transaction alerts. More recently, a Protection from Scams Bill, currently under public consultation, proposes giving the police powers to freeze bank accounts suspected of being targeted in scams.

Despite these efforts, scams persist. In some cases, anti-scam measures even cause inconvenience. For example, while transferring money from Singapore to the UK, I received a phone call from my bank to verify the transaction. Ironically, scammers often operate through unsolicited phone calls, making this intervention feel unsettling. Though such measures aim to protect, they can sometimes disrupt legitimate activities.

Safely Instant: The Case for Knowing Your Payee 
The rise in scams globally is largely due to the growing dependence on faster payments and the digital economy. While instant payments bring convenience, they also create opportunities for criminals. Singapore’s PayNow system, introduced in 2017, allows residents to make real-time payments by entering a mobile number, but there’s room to improve its security.

In the UK, faster payments also facilitated a surge in scams until the government introduced a novel solution—Confirmation of Payee (CoP). This service requires the beneficiary's account details to be verified before payment. The system checks whether the payee’s name matches the account records, returning one of three results: Match, No Match, or Partially Match. Since its introduction in October 2022, CoP has helped reduce investment scams by 20% and impersonation scams by 30%.

European regulators have taken note of the UK’s success and mandated a similar system, called Verification of Payee (VoP), for all credit transfers in Europe by October 2025. Countries like Australia, New Zealand, and several of Singapore’s neighbours, including Malaysia and Thailand, are also adopting such measures.

Table: Which countries have deployed validation schemes?

An Industry Call to Action
To strengthen Singapore’s defences against scams, the payments industry and particularly Singapore’s largest banks can take several key steps:

1. Remove Nickname Flexibility in PayNow – Scammers can easily impersonate someone by changing their PayNow nickname. Instead, the actual account owner’s name should be returned, partially masked, as is done in other countries.
2. Implement Verification of Payee for All Credit Transfers – Similar to systems in the UK and Europe, Singapore should introduce payee verification, ensuring that the name of the account holder matches the payee details before a transfer is approved by the payment sender.
3. Engage with Singapore’s Fintech Community – Singapore has a vibrant fintech scene with the expertise needed to develop effective payee verification solutions. Collaborating with these innovators can help fast-track the implementation of such services.

Knowing your payee through validation technology can play a pivotal role in fighting scams. It not only breaks the trust scammers rely on but also builds confidence in Singapore’s payment systems. By empowering people to verify who they are sending money to, Singapore can take a major step towards reducing the economic and psychological harm caused by scams.

By Michael Moon

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