Singaporean banks DBS, OCBC, and UOB introduce money-locking features in response to scams

SINGAPORE: In response to a significant loss due to scams suffered by victims in Singapore, several banks in the country have taken measures to protect their customers.

On Monday (27 Nov), DBS/POSB, UOB, and OCBC unveiled their respective money lock features aimed at combating digital threats and scams.

These features allow customers to secure their funds digitally, preventing unauthorized access.

DBS/POSB and UOB have opted for a new account type to introduce this feature, while OCBC enables customers to allocate funds within their existing accounts for this purpose.

To access these ‘locked’ funds, strict identity verification will be mandatory, ensuring enhanced security against potential fraudulent activities.

DBS introduced “digiVault” for their customers to prevent unauthorized transfers

DBS has introduced a new feature named digiVault, offering customers the ability to digitally secure their funds within a designated account, preventing digital transfers of these locked funds.

DBS said customers can conveniently apply for a digiVault account through the bank’s digital banking platform, with approval typically granted within a minute.

Upon receiving a push notification confirming the readiness of their vault, customers can initiate fund deposits.

Accessing funds from the vault requires a visit to a DBS or POSB branch for identity verification. After verification, the funds will be transferred to the customer’s DBS or POSB account. Closing the vault account also necessitates a visit to a branch.

DBS announced that digiVault will be accessible to all DBS and POSB customers by 7 December.

From 27 November to 29 February 2024, customers opening and depositing money into a digiVault can earn an additional 1.8% per annum interest on their average daily balance, provided as a lump sum at the end of the promotion.

However, only the first digiVault account is eligible for this additional interest among customers with multiple digiVault accounts.

Additionally, customers have the option to lock their fixed deposit accounts, preventing premature digital withdrawals or changes to maturity instructions.

DBS highlighted that this feature significantly reduces the risk of scammers making unauthorized digital withdrawals of fixed deposit funds if they gain access to customers’ phones and accounts. Customers interested in utilizing this feature can use the bank’s digibot on its website, where they will undergo authentication for their request.

The locking process for fixed deposit accounts typically takes about two working days. Upon completion, customers will receive a notification email. Unlocking a fixed deposit account requires a visit to a bank branch.

UOB’s “LockAway Account”

UOB has unveiled the UOB LockAway Account, offering customers the ability to create accounts specifically designed to restrict digital payments and outbound transfers.

According to UOB, customers can solely access their locked-up funds by physically visiting UOB bank branches and completing an identity verification process.

“UOB is also evaluating ATM withdrawals as an additional mode of cash dispensation, and may introduce it in the near future subject to customer feedback,” said UOB in a statement.

UOB said starting from 30 November, customers can digitally open LockAway accounts through the bank’s website, app, or at branch locations.

“Given the nature of the account, there will not be a minimum initial deposit or balance requirement,” said UOB.

“As an additional safeguard, no cheque book will be issued for the UOB LockAway Account, and existing cards cannot be linked to it.”

Account holders will have digital access to view balances and make deposits into the LockAway Account.

UOB further announced that funds maintained in the LockAway Account will accrue interest, with specific rates slated for future disclosure.

OCBC’s money lock feature for existing accounts

OCBC offers its Money Lock feature without requiring customers to open a new bank account. The feature enables users to lock funds using the bank’s app or internet banking platform.

Customers have the flexibility to lock up funds in multiples of S$10, with the maximum limit set as the available balance in their bank account and a minimum threshold of S$10.

To unlock funds, customers can use OCBC ATMs or visit a bank branch. For unlocking at ATMs, customers will need a credit or debit card along with their PIN.

Beginning 30 November, customers will have the option to unlock their funds at ATMs located within OCBC branches, with a plan for the rollout to all OCBC ATMs by the end of December.

OCBC assures customers that the funds locked in their accounts will be aggregated with unlocked funds to calculate the interest earned, ensuring they continue to receive bonus interest on their overall account balances.

The bank emphasizes responsible use of the feature, stating, “Customers must consider their regular or recurring expenses, near-term needs and plan for emergencies, and only lock excess funds that they do not require for use in the foreseeable future.”

Scam-related losses in Singapore hit S$2 billion over 3-year period

Between January 2020 and June 2023, victims in Singapore suffered approximately S$2 billion in losses due to scams.

Globally, scammers were estimated to have stolen around US$1.02 trillion from August 2022 to August 2023, as reported by a study conducted by the Global Anti-Scam Alliance and ScamAdviser, a data service provider.

Singapore Police Force’s (SPF) data from February indicated an increase in losses, with victims in Singapore losing S$660.7 million in 2022 compared to S$632 million in 2021.

These trends were also evident in Singapore, with phishing scams being the most common in 2022, resulting in 7,097 cases and a loss of $16.5 million, according to SPF.

On 25 October, the Monetary Authority of Singapore and IMDA proposed the Shared Responsibility Framework to address losses resulting from scams and allocate responsibility among financial institutions, telcos, and consumers.

Separately, The Central Provident Fund (CPF) announced on Monday a default online withdrawal limit of S$2,000 (approximately US$1,490) per day will be enforced for all CPF members aged 55 and above in Singapore.

This measure aims to enhance the protection of Central Provident Fund (CPF) members against potential scams.

CPF members have the flexibility to adjust this daily limit between S$0 and S$200,000 by accessing their accounts online.

However, any increase in the withdrawal limit requires Singpass face verification (SFV) and includes a mandatory 12-hour cooling period to prevent unauthorized modifications, as specified by the CPF Board.