Close regulation of business platforms that draw scammers key to capping law-enforcement costs

BEING safe is often taken for granted in Singapore – but it costs money.

The latest Budget has allocated a total of S$26.8 billion to security and external relations, which encompasses the efforts of the Defence, Home Affairs and Foreign Affairs ministries.

One very visible challenge in this field is containing the surging cases of online scams, which often involve platforms operated by Singapore’s most prominent banks, telecoms companies and online marketplaces.

The Singapore Police Force (SPF) said in a report on Feb 8 that there were 31,728 scam cases in 2022. This was 32.6 per cent more than the 23,933 cases in 2021, and more than five times as many as the 6,234 cases in 2018.

A total of S$660.7 million was lost through these scams last year, versus S$632 million in 2021 and S$151.4 million back in 2018.

Phishing scams – where scammers use emails, text messages or even voice calls to trick their victims into revealing their credit card or bank account information – are currently the most common form of scams. There were 7,097 phishing scam cases reported in 2022, up 41.3 per cent compared to 2021. The total amount reported to have been lost by victims, however, declined 52.6 per cent to S$16.5 million.

The next most common form of scams in 2022 were job scams, where victims are lured into parting with money upfront to take up bogus jobs that supposedly pay lucrative commissions. There were 6,492 such cases reported last year, up 42.7 per cent. The total amount reported to have been lost by victims increased 29 per cent to S$117.4 million.

Then there were e-commerce scams, where victims do not receive the goods or services they purchased online. There were a total of 4,762 e-commerce scams reported in 2022, up 74.5 per cent. The amount reported to have been lost jumped 261 per cent to S$21.3 million.

The authorities in Singapore are responding aggressively to this crime wave. In particular, the SPF has been working with the corporate sector to disrupt the scammers and raise public awareness of potential scams.

The major banks now have staff co-located at the SPF’s Anti-Scam Command, which allows for enhanced coordination on tracing funds, freezing bank accounts and flagging unusual account activities. In 2022, the Anti-Scam Command froze more than 16,700 bank accounts and recovered about S$146.6 million.

SPF has also been working with the local telecoms companies to terminate mobile lines found to be used for scams. In 2022, more than 6,500 mobile lines were terminated.

The SPF report last week noted that scammers are typically part of organised crime groups and run transnational operations that are difficult to uncover and dismantle. Nevertheless, close collaboration between SPF and overseas law enforcement agencies resulted in 13 scam syndicates being taken down in 2022. More than 70 people based overseas who were involved in 280 scam cases were arrested.

As the volume of business activities conducted online continues to grow, it seems likely that the authorities will be busy in 2023 and beyond, keeping everyone safe from cybercriminals. In fact, the SPF said on Feb 10 that a two-week operation from Jan 27 to Feb 9 resulted in 296 men and 138 women assisting in investigations for their suspected involvement in more than 886 scams.

The government will, doubtlessly, keep the relevant ministries and agencies adequately funded to cope with this task. But some hard trade-offs might be necessary.

One question that should perhaps be asked is whether companies that operate the platforms on which scams take place are doing enough to curb the “negative externalities” of their businesses on the Singapore public.

The SPF report said 38.5 per cent of e-commerce scams in 2022 took place on Carousell, a celebrated startup that called off plans last year to list at a valuation of US$1.5 billion. A further 23.9 per cent of e-commerce scams last year happened on Facebook, which is part of Meta Platforms. Another 6.5 per cent involved Shopee, the e-commerce arm of Sea Ltd.

By their nature, Singapore-listed heavyweight companies such as DBS, OCBC, Singtel and UOB are also often involved in common online scams.

The SPF report noted that the Monetary Authority of Singapore and the Association of Banks in Singapore introduced two rounds of anti-scam measures last year – which included banks removing clickable links in emails and text messages, and introducing self-service “kill switches”.

Separately, the Infocomm Media Development Authority has made it mandatory for organisations that use SMS Sender IDs to register with the Singapore SMS ID Registry. Telecoms companies will also implement anti-scam filtering solutions within their networks.

While many companies were probably more than willing to take these measures to protect their stakeholders, continued regulatory engagement and pressure could be necessary to ensure their resolve to curb online scams does not wane – and that the public sector cost of dealing with these crimes does not escalate.