Associate Professor Christian Hofmann calls for legislation to address complex legal issues resulting from fraudulent bank transactions

OCBC’s decision to give “goodwill payouts” to customers hit by an SMS phishing scam was not surprising given the public attention on the incident, lawyers said, but the move is unlikely to set a precedent for future cases. All affected OCBC customers – at least 469 victims who lost a total of S$8.5 million, according to the police – will receive full payouts covering the money they lost, the bank said on Wednesday (Jan 19).

NUS Law Associate Professor Christian Hofmann, deputy director at the National University of Singapore’s (NUS) Centre for Asian Legal Studies, agreed that the bank’s decision is one of “goodwill” and possibly spurred by the intention to maintain its reputation and scrutiny from authorities.

“This is a pretty high-profile incident and as such, the bank is under pressure and MAS (Monetary Authority of Singapore) has already announced that it will look into the security technology that OCBC applied in order to protect its customers from exactly this kind of scam attack,” said Assoc Prof Hofmann.

“These contractual terms, however, tend to be biased against customers, making it “practically impossible” for scam victims to come up with a serious defence to prove that they were not liable for the losses. If you look at the current terms and conditions set by banks, customers are burdened with a whole lot of obligations and duties, but what’s really missing is a clear rule on what is required for gross negligent breach of these obligations.” he added.

Read more about what our Associate Professor Christian Hofmann has to say about the complex legal concerns that surround this issue here.