Monetary Auth of Singapore A bad precedent for OCBC Bank to make full compensation
OCBC bank decided to provide "goodwill payments" to compensate their customers fully for the sums that were fraudulently transferred from their accounts which have been breached.

Earlier, I had suggested that the bank should share the loss equally with their customers, i.e. the compensation should be for 50% of the amount lost. 

While the fraud could be partly attributed to the weak internet banking protocols (and this is just a suspicion), the customers have been negligent themselves in providing the login credentials to the fake website. 

All banking customers have been warned countless times in the past about the risk of phishing websites. 

While it is a nice gesture for the bank to make full payment, it will create a bad precedent for the future. 

Many customers from OCBC and other banks may expect to receive full compensation for this kind of frauds, even though they had partly contributed to the fraud through their negligence. 

I suspect that the Monetary Authority of Singapore (MAS) had advised or pressured OCBC Bank to make this full compensation. If so, it was an unwise decision. 

It is also unfair to the shareholders of OCBC Bank to bear the full loss. (I hold a small number of shares, but it does not affect my view on this matter).

The suggestion that this move will enhance the reputation of the bank is probably unjustified. Surely, this will tell the customers that they do not need to be careful.

I suggest that MAS should issue a statement to reinforce the responsibility of the customer in safeguarding their login credentials, and that this full compensation will not be a precedent for the future. 

More importantly, MAS should work actively with the Police to investigate and stop this kind of scam, which has happened on many occasions in the past. The perceived lack of investigation and counter measures had  encouraged the scammers to expand their activities. 

The excuse that it is difficult to catch the scammers that operate from overseas is a weak one. It showed the lack of initiative from the people involved and the tendency to find excuses to avoid taking the hard steps to solve the problem. (I will be happy to suggest  what can be done, and to help in carrying out the strategy).

Tan Kin Lian
 

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