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Students from the National University of Singapore Pro Bono Group prepared this guide. The guide is for public education and is not legal advice.

What are banking disputes?

Banking disputes refer to issues you may run into with banks and finance companies. Click here for a list of banks and other financial institutions (“FI”) licensed by the Monetary Authority of Singapore (“MAS”).

More than half of the claims received by the Financial Industry Dispute Resolution Centre (“FIDReC”) each year are against banks and finance companies. These include disputes arising from:
  • Unauthorised credit card transactions.
  • Unreasonable recommendations of financial products.
  • Victims of scams claiming negligence on the part of the bank.
  • Clients alleging that the bank representative gave negligent advice.
  • Clients alleging that the bank representative made false or misleading statements.

What should I do when faced with a banking dispute?

Generally, there are 4 possible steps that you can take.

Step 1: Speak to your FI first

Contact your FI so they have a chance to resolve your banking dispute. The MAS expects all FIs to handle all consumer complaints effectively and promptly. You can find your FI's contact details using the Financial Institutions Directory.

Before you contact the FI, you should be clear on your concerns and how you would like the FI to help with these concerns. Get your customer reference number, account or policy number, and other supporting documents ready.

You should actively follow-up with your FI if you do not get a response from them within 2-3 weeks.

Step 2: Approach FIDReC for help

If you cannot resolve the matter with your FI after 4 weeks, you may approach FIDReC for mediation. There is no cost to consumers to do so.

FIDReC is an independent dispute resolution institution handling disputes between consumers and licensed FIs. FIDReC provides a low-cost and effective avenue to resolve problems that cannot be settled directly with your FI.

FIDReC adopts a 2-step process.
 
  1. A case manager will mediate the dispute between you and your FI. If the dispute is not settled by mediation, you can choose to bring your case to the second stage of adjudication.
 
  1. An adjudicator will decide on your dispute based on the facts and merits of the case. If you choose to proceed to adjudication, there is a nominal fee of S$50 (plus GST).

Please note these limitations before approaching FIDReC:
  • FIDReC is only able to assist individuals or sole-proprietors.
  • Claims that exceed S$100,000 cannot be referred to adjudication unless the consumer limits their claim or the FI agrees to the higher limit.
  • You must approach FIDReC within 6 months of receiving the final reply from the FI to ensure that FIDReC is able to assist you.
  • Your claim must not fall under the types of claims that FIDReC cannot handle under its Terms of Reference. For example, claims already decided in court or settled privately.

You can find out more about FIDReC's Dispute Resolution Process or file a complaint using the Online Dispute Resolution Form. For more information, please visit FIDReC’s Frequently Asked Questions page or submit an enquiry.

You would need to complete and submit a dispute resolution form to FIDReC for them to assess the dispute. You should also submit details of your communications with the FI, and all other relevant supporting documents.

Do note that the FIDReC adjudication outcome only binds the FI and not the consumer. This means that if you are not satisfied with the outcome, you can continue to pursue other avenues of recourse. This includes taking legal action.

Or you can approach the Consumers Association of Singapore (“CASE”), the Singapore Mediation Centre (“SMC”), or the Small Claims Tribunal (“SCT”). These organisations handle disputes across all types of products and services.

Step 3: Taking legal action against the FI

Resolving banking disputes through legal action is usually a final resort. Legal action is time-consuming and expensive. You should get advice from a lawyer before taking legal action. If you wish to engage the services of a lawyer, you can access the Legal Services Regulatory Authority for a list of practising lawyers here.

Or you may approach the Legal Aid Bureau for legal aid and advice. Do note that you would need to meet specific prerequisites to do so. Find out more here.

Step 4: Reporting your FI to the MAS

The MAS is a financial services regulatory authority, and handles regulatory breaches or misconduct by an FI.

You should report to the MAS if you encounter:
  • Inappropriate or misleading advice;
  • Misrepresentation of (financial) products and/or services;
  • Lack of disclosure in the sales and advisory process; or
  • Suspicion of fraud, cheating, criminal breach of trust, forgery, or other forms of fraudulent accounting or corruption by your FI.

Other offences that should be reported to the MAS include false/misleading advertising, market manipulation, insider trading, criminal breach of trust, forgery, fraudulent accounting, or corruption. The Banking Act 1970 lists other offences.

Generally, the MAS is unable to resolve disputes involving:
  • A FI’s pricing policies,
  • Private contractual arrangements between you and your FI, and
  • Compensation that you want from your FI .

To file a report with MAS, click here. For more general guides or information on resolving banking disputes, click here.

What Precautions Can I Take as a Retail Consumer?

Responsible banking can help you avoid banking disputes. Some precautions you can take include:
 
  1. Research the FI before using their service. Check that they are a licensed bank or finance company via the Financial Institutions Directory. Check that the representative that you are engaging with is a licensed representative.
 
  1. Educate yourself on the terms of the banking product you are using. These include terms of use of credit card, digital banking, or fixed deposits. Understand how the product works and what are some of the potential pitfalls. The Association of Banks in Singapore provides free education materials with more information on banking products, such as deposit accounts, and home financing.
 
  1. Always safeguard your personal financial information and log-in details, including the One-Time Password.
 
  1. Monitor and read the notifications that you receive from the bank or finance company. Report any unusual activity immediately.
 
  1. Understand the interests and fees you may be charged for banking products and services. Always ask up front how much these services cost, and when you will incur charges. You may be charged fees related to your account, such as account opening, closing, transfer, and maintenance fees.
 
  1. Keep a good record of documents and communications (e.g., emails, letters, phone calls) with the FI. This includes keeping photocopies of relevant contracts and service agreements. Make sure you note down the name of the addressee, date, and time of any correspondence with the FI.
 

Sources

Keywords: Banking Products