I am sure almost all of you know of the recent fraudulent credit card transactions that appeared in the news last week. Many Singaporeans who shop online received a rude shock when a Taiwan company Neweb Technologies billed unsuspecting consumers NT$1150 which they never spend.
I work in a bank dealing with compliance, risk management, operations and this is the low down of how the banks and the Ministry of Finance, MAS, is hiding certain information from consumers who have the right to know what happen.
It has been a very demoralizing week at work for me and made worse after reading the statement made by The Association of Banks in Singapore (ABS) published on news yesterday. It said, “Preliminary investigations indicate that there was no breach of any systems within the banks. All affected customers in Singapore will not be liable for these unauthorized transactions. Banks are working with the credit card associations to investigate these incidences.”
“The ABS clarified that while banks in Singapore have enhanced their security measures and safeguards, cardholders can also play their part when shopping on-line.”
Some may think it was a kind gesture on the part of the banks to waive liability for all those affected. But the fact is that there was a criminal act involved and consumers need not take on liability in the first place.
The real reason why the frauds took place was because ComGateway was hacked and hundreds of thousands of consumers’ credit cards and cvc numbers were compromised. Yes, they were stolen because ComGateway, one of the major online concierge/forwarding provider, did not secure the information stored with them. In other words, consumers were open to fraudulent charges not only from Neweb but also any company which the crooks had connection to or sold the information to.
So when the banks say that cardholders need to “play their part” when performing online transaction, it is rather unfair. How can cardholders be aware of such possibilities, when it is expected of the banks and MAS to ensure that credit card transactions, at the operational level, are safe?!
Is MAS, as a regulator, trying to conceal vital information from consumers? Absolutely appalled with MAS, as they should have be upfront with consumers and informed them that it was ComGateway that was compromised. Consumers have the right to know and take precautionary measures.
Working in a bank, I can understand why banks would want to minimize the impact of this issue because it affects the confidence that consumers have in e-commerce, a fast growing business by the way. But why would MAS hide behind the shadows? What vested interests do they have?
Modern online transactions have become increasingly complex as organizations try to deal with the problems arising from global online marketplaces, local merchants, online forwarders, and international finance. As usual, the government has allowed big business to grow bigger and earn bigger profits, while doing the bare minimum for security and fiduciary duty. Simply said, the interest of consumers is the last of their concerns as long as the economy is growing.
MAS seems to have lost its lead role regulating the many parties involved in online shopping and the multifaceted challenges that it brings. It cannot be the case where only banks are regulated while others can operate at the lowest costs possible without giving a damn about personal security.
If MAS continues to twiddle its thumbs and take a “hands off” approach, only consumers will suffer as more of such cases are bound to surface.