MHA considering various proposals for compensating scam victims
Member of Parliament Gerald Giam suggested establishing a scam victim restitution fund financed by the confiscated proceeds from recent money laundering cases.
E-commerce scams made up the highest number of reported cases among all scam types in 2024, with concert tickets the top item involved in the scams. (File photo: iStock/ArisSu)
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SINGAPORE: The Ministry of Home Affairs (MHA) is considering various proposals on how to best compensate scam victims, said Minister of State for Home Affairs Sun Xueling on Friday (Feb 28).
She was responding to a supplementary question from Member of Parliament Gerald Giam (WP-Aljunied) about whether the government has considered establishing a scam victim restitution fund financed by the confiscated proceeds from recent money laundering cases.
Law and Home Affairs Minister K Shanmugam said on Feb 26 that assets surrendered to the state as part of the S$3 billion (US$2.2 billion) money laundering case are progressively being liquidated and returned to government coffers.
A total of 54 properties, 33 vehicles and 11 country club memberships were liquidated as of December 2024, and proceeds from the liquidation of non-cash assets would be paid into the government’s consolidated fund, he had said in parliament.
Setting up a consolidated fund for victims to recover the money they lost poses operational challenges, said Ms Sun on Friday.
For example, the authorities cannot ascertain that all the money recovered by the Anti-Scam Centre all come from scams, she added.
The syndicates that run these scams often operate other crime business lines as well, including illegal moneylending, said Ms Sun.
“There could be other proceeds that pertain to other forms of crime, and therefore there are other victims who may also similarly feel that they have a claim to those proceeds,” she said.
Tracking whether a dollar that was recovered is the same dollar lost by a victim is also difficult because of the comingling of funds, said Ms Sun.
Especially in cases where cryptocurrency is involved, it is often very difficult to ascertain which victim that dollar was scammed from, she noted.
As a result, with a consolidated restitution fund, it would be difficult to tell which victim has a right to the money that was recovered, said the minister of state.
The money recovered from scams are a fraction of the amount lost to scams, Ms Sun stressed.
At least S$1.1 billion (US$822 million) was lost to scams in 2024, and the Singapore Police Force managed to recover more than S$182 million of scam losses in 2024, making the net loss about S$930 million.
“There are going to be far more claimants for the monies than there are actually proceeds, in the monies that are recovered,” said Ms Sun.
Even if victims can recover some of their funds, it would be a “tiny fraction” of what they lost in the first place, she added.
It is operationally challenging to apportion and thus track the amount of scam proceeds returned to victims or forfeited to the state. This is because seized proceeds could be co-mingled with other non-scam-related activities such as cases involving unlicensed money lending. Seized proceeds may also not directly correlate to crimes committed that same year. Minister of State for Home Affairs Sun Xueling said this in parliament on Friday (Feb 28) in her reply to an MP’s questions. She added that the Ministry of Home Affairs will explore the feasibility of tracking these amounts in the longer term.
If scammers know about the scam recovery fund, they may pivot and use it to entice mules to participate in scam activities and then potentially try to recover the money from the fund, said Ms Sun.
“At the end of the day, principle-wise … we should do our very best to be able to find some way of recovering proceeds and of course compensating victims,” she added.
Since December 2024, a framework has prescribed how losses arising from phishing scams will be shared among financial institutions, telecommunication companies and consumers.
Financial institutions will be first in line to bear the full losses incurred if their required duties – such as providing real-time outgoing transaction notifications – are breached.
Telcos stand second in line. This means that if the financial institution has fulfilled all its required duties and the telco is assessed to have breached its duties, the telco will be expected to bear the full losses.
If both the financial institution and telco have carried out their necessary duties, the consumer would then bear the full losses.
Parliament also passed a new law in January that provides the police with powers to order banks to restrict the banking transactions of potential scam victims.
Specified officers will be able to issue restriction orders to banks if there is reasonable belief that account holders will be making transfers to scammers.
These restriction orders will suspend money transfers, the use of ATM facilities and all credit facilities, although individuals will still be provided access to their monies for daily living expenses.
