SINGAPORE — The Central Provident Fund Board (CPF) has “no intent” to consider introducing an insurance scheme to protect its members against losing their CPF funds to scams, said the Ministry of Manpower (MOM) on Tuesday (July 4) night.

MOM's clarification came hours after Manpower Minister Tan See Leng said in Parliament that the authorities might take up insurance to protect Singaporeans from CPF losses resulting from scams under the Shared Responsibility Framework that involves the financial institutions, telecommunication companies and many other participating entities.

In its statement, MOM also clarified that insurance schemes are not part of the Shared Responsibility Framework that the Government is developing with industry stakeholders.

Dr Tan was responding in Parliament to a question from Associate Professor Jamus Lim, a Member of Parliament (MP) for Sengkang Group Representation Constituency (GRC), who had asked if the Government was “considering initiatives along the lines of insurance” for this purpose.

“I mention this in part because as I'm sure he's aware, in usual banking related frauds, insurance plays a big part in helping to recover fraudulent monies,” said the Workers’ Party MP.

“And in this case, CPF is both a mandatory saving scheme but also is a very, very big supplier, so it may be possible to secure a fairly competitive insurance rate for the purposes of doing this kind of additional protection.”

His question was among several raised by MPs following a recent spate of scams that resulted in some CPF account holders losing their money.

Authorities last month warned about cases where victims were tricked into downloading malware into their phones, which then compromised their mobile devices, resulting in unauthorised transactions from the victims’ bank accounts even though they did not reveal their internet banking credentials, one-time passwords or Singpass credentials to anyone.

In some cases, CPF savings were withdrawn and credited to victims' bank accounts before being transferred out.

In its statement on Tuesday, MOM said that the police will spare no effort in tracking down those responsible for such malware incidents and will take tough action against them.

MOM said that the Government has been in discussions with key parties such as financial institutions and telecommunication companies on the Shared Responsibility Framework, and will continue to study the scope of the framework, including the type of scams and roles of other entities in the digital payments ecosystem. 

It added that the focus of the framework is on strengthening the roles and accountabilities of the key parties which can mitigate the risk of phishing scams and to preserve confidence in digital payments and banking in Singapore.

This includes making clear the duties of these parties and the responsibility of customers themselves to be vigilant against scams.

The framework will also establish the appropriate mechanisms for sharing losses amongst these parties when scams occur and duties are breached, said MOM.

“This is a distinct and separate approach from scam insurance, where a third party provides guarantee of compensation to an insured party, when he or she suffers scam losses,” it added.

Dr Tan on Tuesday said that although nine reports were made relating to CPF accounts, the authorities managed to stop the money from being successfully transferred out in one of the cases. The remaining cases involved a net loss of S$124,000 in CPF savings.

The victims of these cases were between the ages of 55 and 80, said Dr Tan.

Dr Tan said that separately, Singapore's banks, the Monetary Authority of Singapore (MAS), GovTech and the police are also working on initiatives to protect banking customers against unauthorised withdrawals from their bank accounts.

Meanwhile, Dr Tan said an additional facial recognition verification step was introduced last month in light of the recent cases.

“Thus far, we think that it is sufficient to effectively limit convenience in terms of the withdrawal of monies from the CPF accounts to their own bank accounts,” he added.

Explaining the measure further in reply to a supplementary question by Aljunied GRC MP Gerald Giam, Dr Tan said that the measure can ensure that the person who is logging in and making withdrawals “actually corresponds to the actual member himself, and not through some scam account”.

Mr Giam, who is also from the Workers' Party, asked if the scammers in the recent cases were able to obtain victims’ credentials due to vulnerabilities in their devices, and, if so, whether GovTech was working on a patch for it.

Dr Tan clarified that the credentials were stored in the phones and were retrieved by scammers as a result of the malware downloaded by the victims.“So we have to constantly work at nudging our people, working with one another to keep reminding all of our members, all of our citizens to always be vigilant, and at the same time, the Government will also constantly find new ways to step up our precaution to protect our members," he said.