FIDReC sees a 32% rise in claims during FY2023/2024 amid increased fraud and scams

SINGAPORE: The Financial Industry Disputes Resolution Centre (FIDReC) has announced a 32% increase in claims received during the financial year from 1 July 2023 to 30 June 2024 (FY2023/2024). According to data released on Thursday (21 Nov), FIDReC received 2,894 claims during the period, compared to 2,189 in FY2022/2023. Of the claims received, 2,162 were accepted for handling, marking a 45% increase from the previous period. This rise coincided with 5,448 enquiries being processed, indicating a broader need for financial dispute resolution. FIDReC, a not-for-profit entity specialising in the mediation and adjudication of consumer financial disputes since its inception in 2005, successfully completed 1,728 claims—a 47.4% rise from the prior year—and resolved 88% of cases within six months.

Mediation plays a major role in resolution

Most claims were resolved at the mediation stage, with 84% (1,449 cases) of completed claims settled at this phase. Among these, 77% (1,113 cases) resulted in settlement offers that were accepted by consumers. Cases not resolved at mediation either did not proceed further or moved to adjudication. Of the 279 claims adjudicated, 16% (46 cases) resulted in awards favouring the consumer, while the rest did not lead to consumer awards.

Rising fraud and scam claims

Claims related to fraud and scams continued to rise, forming a significant proportion of FIDReC’s caseload. Fraud and scam claims increased to 829 in FY2023/2024, up from 509 in FY2022/2023 and 261 in FY2021/2022. These cases accounted for nearly 38% of all claims handled during the financial period and 60% of claims against banks, finance companies, and credit bureaus—the most commonly claimed-against category. Among fraud and scam cases, mediation resolved 91% (700 cases), with 80% receiving settlements. The remaining 70 cases were adjudicated, leading to 13 awards in favour of the consumer. Credit card fraud made up 59% of such claims, while deposit account scams accounted for 39%.

Other categories of claims also increased

FIDReC observed a rise in claims across other financial institutions:

• Life and composite insurers: 387 claims, up from 191 in FY2022/2023.
• General insurers: 241 claims, up from 229.
• Capital market services: 86 claims, up from 39.
• Licensed financial advisers and insurance brokers: 61 claims, up from 38.

Disputes categorised by type also showed growth, with claims related to financial institutions’ practices and policies rising to 694 (from 465 in FY2022/2023), market conduct disputes increasing to 376 (from 320), and service standard claims climbing to 263 (from 201).

Preparations for future challenges

As claims have grown in volume and complexity, FIDReC stated it has made operational adjustments to address future demands. Updates to its Terms of Reference, effective 1 July 2024, aim to enhance its jurisdictional and procedural framework. FIDReC’s Chief Executive Officer, Eunice Chua, noted that the rise in disputes indicates increased demand for financial dispute resolution services. "The rising number of claims shows the increased need for FIDReC’s services in resolving disputes between consumers and their financial institutions. However, prevention is better than cure." She added, "We have intensified our public outreach efforts with the objective of educating more consumers on what to look out for when purchasing financial products and to remind them to remain vigilant against scams. Additionally, we hope that financial institutions will learn from the claims brought and continue to strive towards higher standards of customer service, professionalism and fair dealing outcomes." FIDReC, a not-for-profit company, was created in August 2005 with support from Singapore’s Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS), alongside other key stakeholders in the financial industry. It was part of efforts to enhance consumer protection and strengthen trust in Singapore’s financial system.