A Guide to Common Banking Disputes & How to Resolve Them

Have you ever been confused by a bank charge that you do not remember making or authorising? You are not alone. We rely on banks for everything, from savings to everyday payments. When things go wrong, it can quickly become a source of worry.

In Singapore, there are avenues and processes in place to help you resolve your disputes with a bank, ranging from internal complaint processes within banks to independent dispute resolution services, regulatory reporting, and even the option to take legal action if necessary. If you are currently facing a dispute with your bank and want to find out more about how you can resolve it, this article is for you.

This article aims to shed light on the following key topics:

• What are banking disputes?
• What are some common banking disputes?
• What can I do when faced with a banking dispute?

What are Banking Disputes?

Banking disputes refer to any kind of disagreement you might have with your bank. It could arise from a variety of circumstances like spotting an unrecognised charge on your account, falling victim to scams involving your bank account, receiving unreasonable recommendations of financial products, or bank representatives giving negligent advice or making false/misleading statements.

Some of these problems are small and easy to fix, while others can be more serious – especially if they involve large sums of money or concern significant long-term financial commitments.

Common Banking Disputes 

Let us now take a closer look at some common situations where you may face a dispute with your bank:

Unauthorised credit card transactions refer to charges made to your credit card without your permission. This could happen if someone steals your card details and uses them to purchase items. These situations can be stressful, especially when you see unexpected sums of money deducted from your account. For instance, in November 2024, a doctor’s credit card was charged six times without her knowledge. The unauthorised payments were made to AirAsia, even after she had changed her card and blocked further transactions. The bank had to investigate to determine the source of the unauthorised charges and resolve the issue.

Scam-related disputes arise when a scammer gains access to your account without consent and makes unauthorised transactions. You may have clicked on a phishing link and entered your banking details on a fake website, or may have been impersonated by the scammer. While you are expected to remain on the alert for phishing and impersonation scams, your bank is also expected to implement adequate security measures to protect you from scam losses, and to flag suspicious transactions based on your past spending patterns. For example, in one case reported to the Financial Industry Disputes Resolution Centre Ltd (FIDReC), the victim keyed in his credit card details on a fake website that made five overseas transactions of between $2,000 and $5,000. Typically, the victim should have borne most of the losses as he did not check when keying his credit card details and did not alert the bank when his card was added to a mobile wallet. However, FIDReC ordered the bank to share the victim’s losses as the bank should have realised that the customer only used his card for transactions below $100 locally and never for purchases in a foreign currency.

Unreasonable recommendations of financial products can happen when your bank representative or financial advisor suggests a product – like an insurance plan, investment, or loan – that is not suitable for your financial situation. For example, you may be a retiree looking for safe investment options but are sold a high-risk investment plan that may require you to take a big loan that you cannot afford. In March 2024, a 63-year-old man went to a bank to renew his $100,000 fixed deposit but was falsely misled into buying a $180,000 insurance product that required him to take up an $80,000 loan. He was given false advice that the product would give him a stable retirement income. The man later found that he did not receive any income and had to pay a significant amount of interest on the loan. He brought his case to the Financial Industry Disputes Resolution Centre Ltd (FIDReC) which ordered the bank to compensate him.

When bank representatives make negligent or false/misleading statements, it means they have provided information that is either careless, inaccurate or incomplete, leading you to make decisions that may not be in your best interest. For example, in December 2023, an elderly woman who wanted to put $100,000 into a fixed deposit account was misguided by a dishonest bank employee into investing in a unit trust that he claimed would enable her to earn regular interest, as the product was just like a fixed deposit. The bank employee filled in all the forms, and made her sign under his instruction. The elderly woman was illiterate and only spoke Mandarin. She was unaware that the bank employee had indicated in the forms that the customer had prior experience investing in unit trusts and life insurance policies, which was false. The bank rejected the elderly woman’s claim because she had signed all of the forms and had also received a follow-up call from the bank after she bought the unit trust. The case was also resolved with the help of FIDReC and the bank had to compensate the elderly woman for her losses.

What Can I Do When Faced With a Banking Dispute? 

Dealing with any of the situations above can be frustrating, but it is important to know that there are avenues of recourse if you are faced with a banking dispute. These include:

• Reaching out to your bank directly for assistance;
• Seeking assistance from FIDReC;
• Considering legal action if necessary; and
• Filing a report with the Monetary Authority of Singapore (MAS).

The avenues of recourse have been set out in increasing order of escalation. In other words, you can consider the avenue immediately after the one you have just tried, if you are still unable to resolve the banking dispute.

1. Reaching out to your bank directly for assistance 

In Singapore, the process typically begins by reaching out to your bank directly for assistance. This is particularly useful if your bank is not even aware of the circumstances underlying your banking dispute. The bank will have the opportunity to review your request, and take action where applicable. Banks regulated by MAS are required to have internal processes in place to deal with consumer complaints effectively and efficiently.

For specific kinds of banking disputes, there are also certain measures that you can take. For instance:

• Unauthorised Transactions: For unauthorised transactions, the MAS has published the E-Payment Guidelines, which lay out the bank’s responsibilities to assist users of electronic payments. Under these Guidelines, banks have to provide real-time transaction notifications and a reporting channel so that you can receive alerts if there are unauthorised transactions, and report them if they occur. For example, on the DBS digital banking mobile app, you may report suspected fraud by blocking your card, submitting a request for a fraudulent transaction to replace your card, and viewing the status of your dispute on your digibank app. A step-by-step guide can be found here. For OCBC, you can dispute a transaction via OCBC Internet Banking, the OCBC Digital App or manually by mailing a completed Dispute Declaration Form with the relevant supporting documents attached to OCBC. More details can be found here.
• Scams: For scams, DBS customers who believe their bank details have been compromised, can call DBS on a hotline locally or from overseas to activate the Safety Switch. This Safety Switch disables the usage of digibank online, digibank mobile, Paylah! And all cards. It will not block incoming fund transfers or existing GIRO arrangements pre-authorised by the customer. Customers who want to extend the Safety Switch to these functions can also request to do so by speaking to DBS customer service officers.

2. Seeking assistance from FIDReC

If you are still unable to resolve your banking dispute, you may then consider escalating the issue to FIDReC. FIDReC is an independent dispute resolution institution that provides an affordable and effective avenue to resolve a variety of disputes that cannot be settled directly with your bank.

As mentioned in the previous section, the victims in both the March 2024 and December 2023 cases sought help from FIDReC to resolve their banking disputes. FIDReC facilitated a mediation process between the bank and the consumer, and when that did not work out, they appointed an adjudicator to decide on the outcome. In both of those cases, the adjudicator found evidence of the bank mis-selling the investment products, and ordered the bank to compensate the customers for their losses.

FIDReC’s scope 

Before you start this process, you need to consider whether your banking dispute falls within FIDReC’s scope. In order for a dispute to fall within FIDReC’s scope, the following criteria must be met:

• You have to be an individual consumer or a self-employed business owner with a customer relationship with the bank.
• You cannot refer claims over S$150,000 to adjudication, unless you limit your claim or the bank agrees to the higher limit.
• You have to approach FIDReC within 6 months of receiving the final reply from the bank so that FIDReC can assist. A final reply is a letter from the bank to you that states it is the bank’s “final reply” and that if you disagree, you can contact FIDReC for assistance within 6 months.
• Your claim cannot have already been decided by the court or settled privately.

Be mindful that FIDReC does not act on your behalf or the bank’s, as FIDReC is supposed to handle disputes in an impartial manner. You are required to present your case personally and are prohibited from engaging external legal counsel to represent you during the proceedings.

Process 

After you have checked that your dispute falls within FIDReC’s scope, you can then start the process of seeking assistance from FIDReC. You do not need to pay any fees when you submit your case to FIDReC. The steps to do so, from starting the process to the conclusion of FIDReC’s adjudication, are set out below:

1. To start the process, you will need to register as a complainant with FIDReC. This involves providing your personal details and creating an account to access the portal. If you are helping someone file the complaint, you can fill in the complainant’s personal details on the registration form and then include yourself as the nominee.
2. Once you have registered, complete and submit a dispute resolution form to FIDReC. This form will enable FIDReC to assess your complaint and whether it falls within its scope. Together with the form, you will need to provide details of your communication with the bank and other supporting documents so that FIDReC can better understand your situation.
3. On the next working day after FIDReC has received your form, there will be a 10 working day Early Resolution phase. During this period, the bank may reach out to you directly to negotiate and settle the case if possible. If the bank is still unable to resolve the dispute, FIDReC will thereafter process the complaint by starting the process of mediation.
4. When FIDReC proceeds to mediation, a case manager will be allocated to help both you and your bank reach a mutually acceptable outcome. This is a neutral third party who will not be biased towards the bank or you. The case manager will request for all materials relevant to the dispute and conduct interviews, if necessary, via telephone or in person to better understand your case. The case manager will also reach out to the bank and ask for an investigation report. After obtaining information from you and your bank, the case manager may reach out further to each side to better understand the interests involved, help you and your bank understand the circumstances and the solutions moving forward.
5. If the dispute cannot be settled by mediation, the bank will be informed and given a final opportunity to resolve the dispute. If the bank still does not resolve the dispute, you may proceed to adjudication. The case manager may also give you the “mediator’s indication”. It is an initial opinion from a senior case manager or lawyer to give you an idea of whether your claim is likely to win if it goes to adjudication.
6. When FIDReC proceeds to adjudication, an adjudicator or panel of adjudicators will decide on your dispute based on the facts and merits of the case. While both adjudication and mediation involve a neutral third party, the main difference lies in the role of the third party. While a mediator’s role is to help you and the bank find a mutually agreeable outcome, an adjudicator simply makes a decision based on the evidence and applicable rules or laws. At this stage, you need to pay S$50 (plus GST) for the adjudicator’s services. When the adjudicator or panel of adjudicators has reached a decision, he/they will write and sign a Grounds of Decision, which will be provided to you and the bank. You may decide to accept the decision or award with respect to the dispute. The outcome is final and binding on the bank. There is no appeal process.
7. If you do not accept the decision or award from the adjudicator(s), you and your bank can resolve the dispute through other channels. These may include commencing a legal claim. You can also approach the following organisations for help:
   • Consumers Association of Singapore (CASE). CASE is an organisation that seeks to solve consumers’ problems with businesses, including banks. After submitting your complaint online, CASE will, for a small fee, look into your situation and either help you draft a letter to the bank to share your concerns and your desired outcome, or liaise with the bank on your behalf to seek a win-win resolution. If necessary, CASE can facilitate mediation sessions between you and your bank.
   • Singapore Mediation Centre (SMC). SMC offers professional mediation services for various disputes, including those related to banking. As explained above, mediation is a voluntary process where an unbiased, neutral third party will facilitate discussions between you and your bank to reach a private and win-win solution. The mediation fees vary based on your claim amount and length of mediation. For example, for claims up to $20,000, you have to pay a mediation fee of $218 for up to 4 hours of mediation. If a longer mediation session is required, you will have to pay an hourly fee of $54.50 for each additional hour.
   • Small Claims Tribunal (SCT). SCT is a part of the State Courts of Singapore, and provides a quick and inexpensive way for small claims (of up to $30,000) to be heard without the need for a lawyer. The SCT will typically handle disputes concerning unauthorised credit card charges, as well as banking account and loan issues. You can take an online assessment on the Community Justice and Tribunals System (CJTS) to determine whether your claim can be heard by the SCT, before using a guided online form to file your claim. The filing fees also vary based on your claim amount, and cost from $10 to $300 for claims up to $30,000. Before you attend a hearing at court, the SCT will offer a consultation session where a registrar facilitates discussions between you and your bank. If the dispute still cannot be solved, you will proceed to attend a court hearing where a magistrate will make a binding decision. 

3. Take legal action

If your banking dispute still remains unresolved, you can then consider commencing a legal claim against the bank. This step involves formally bringing a civil claim before the courts to seek compensation for any losses incurred due to the bank’s error, negligence or misleading financial advice. Common civil claims in banking disputes could involve:

• Claims of negligence (if the bank failed to take reasonable measures to protect you against scams, flag suspicious transactions or provide sound financial advice),
• Claims of breach of contract (if the bank did not fulfill its contractual obligations; for example, the bank mishandled your account by charging fees incorrectly, failing to follow your banking instructions or allowing unauthorised access to your account; and
• Claims of misrepresentation (if the bank provided false or misleading information about financial products or services, and as a result of this information, you as the customer were induced to purchase the product or service and thus incurred losses).

Before bringing your case before the courts, you will need to gather all of the relevant supporting documents, such as the correspondence with the bank and account statements. As the claimant, you will need to file a Writ of Summons, which sets out your claims and relief sought, through the eLitigation system within 6 years. The Writ will then be delivered to the bank (the respondent), officially notifying them that you are bringing a civil claim against them before the courts. The bank has a period to respond by stating their side of their story. Both parties then exchange documents related to the case to allow each side to review the evidence and prepare legal arguments.

During the trial, you and your bank, represented by lawyers, will present your cases before a judge. After considering all the evidence and arguments, the judge will deliver a decision and may order the bank to compensate you if you win. If the judge rules in favour of the bank and you do not get compensated, you may consider filing an appeal to a higher court.

However, before you decide to commence a legal claim against the bank, you must assess whether it is worth it for you to do so.

First of all, commencing a legal claim is a more time-consuming process compared to seeking assistance from FIDReC. For example, a banking dispute between a Chinese businessman and Citibank took about two and a half years from when the claimant first filed the lawsuit (in November 2019) before the High Court delivered its judgment (in May 2022). In this case, the High Court dismissed the Chinese businessman’s claims for investment losses, having found clear evidence that the bank was not negligent and did not breach its duty. Imagine waiting for a lengthy period of two and a half years only to have your claim against the bank denied!

Next, it is also expensive to commence a legal claim. Court fees in Singapore can vary based on where the case is heard, the duration of the hearing and how expensive the claim is. At the District Court level, the first day of hearing is free, but subsequent days cost $500 per day. At the High Court level, for claims up to $1 million, if the hearing takes more than 11 days, it could cost up to $5,000 per day for the case to be heard.

Hence, you should seek legal advice before commencing a claim against the bank over your banking dispute, to determine whether pursuing a claim before the courts makes sense for your situation.

4. Report to MAS 

Lastly, if you believe that your bank has acted improperly or violated financial regulations, you can file a report to MAS. MAS is Singapore’s financial regulator and central bank, overseeing the conduct of banks to ensure that they operate with integrity and transparency.

MAS’ scope 

The MAS cannot resolve disputes between you and your bank or order the bank to compensate you and agree to your requests. Instead, MAS can investigate breaches of financial regulations and take action against banks that violate regulations. These can involve:

• Provision of inappropriate or misleading advice, which could happen if a banker promotes a product for you to invest in by making it sound better than it really is or makes a recommendation that is not suitable for your financial situation;
• Misrepresentation of the financial products and services. For instance, a bank could claim that you will make a massive profit from an investment when this is not true, and deliberately hides important information about the risks involved;
• Lack of disclosure in the sales and advisory process. This could happen when key information about the fees, penalties or risks is left out when you are buying an insurance plan or investment, or even taking up a loan;
• Suspected financial crimes such as fraud, cheating, or forgery, which could involve the faking of documents or lying to customers; and
• Unlicensed financial advice or services. It is illegal for someone to pretend to be a financial advisor or investment expert without the appropriate license.

However, do bear in mind that MAS can only assist in cases involving banks licensed by MAS to provide financial services in Singapore. If the bank is not regulated by MAS, you should either approach the institution directly to resolve the case, or lodge a report with the Singapore Police Force as it is an offence to run a fraudulent business in Singapore. You are strongly advised to only deal with banks regulated by MAS; you can verify this by looking through MAS’ banks Directory. You can also check MAS’ Investor Alert List, which provides a list of unregulated persons and entities that may have been wrongly perceived as licensed by MAS.

Process 

In terms of the process of filing a report to MAS, this is relatively straightforward, and involves the following few steps:

1. To start the process, you have to fill in an online form, reporting the name of the bank, name of agent(s)/adviser(s) involved, if any and feedback. You may also attach any relevant documents to the form.
2. After investigations are completed, MAS will assess if the evidence is sufficient to pursue an enforcement action. This could be referring the case to AGC for criminal prosecution (which could include imprisonment or fines or serious offences), civil penalty action, withdrawal or suspension of licence or regulatory status, removal from office, prohibition orders, compositions, reprimands or warnings/letters of advice. MAS will take into account the facts and circumstances of the case, including the harm caused by the breach, the blameworthiness of the offender, the compliance record of the offender, the degree of cooperation shown and any other relevant facts. MAS’ main objective is to deter the offender from reoffending, deter others from engaging in similar misconduct and prevent future harm.

An example of MAS taking action was in December 2023, when MAS fined Credit Suisse $3.9 million for failing to prevent misconduct by its relationship managers in the Singapore branch. These managers provided clients with inaccurate or incomplete information about bond transactions, leading to charges above agreed rates. MAS’ investigations showed that the bank had failed to put in sufficient internal controls, such as post-trade monitoring to prevent or detect the managers’ misconduct. Credit Suisse has since admitted liability, compensated affected clients, and has strengthened its internal processes to ensure fair and transparent pricing to their customers.

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Banking disputes can be daunting, but understanding your rights and the available avenues for recourse is important.

When faced with a banking dispute, you can take the following steps:

1. Contact your bank as soon as you become aware of the issue/discrepancy to explain your concerns and seek a resolution from the bank;
2. Approach FIDReC if the issue remains unresolved. FIDReC is a free and independent platform to mediate disputes between you and your bank;
3. If the case still cannot be resolved, you may consider legal action to recover your financial losses or claim additional damages depending on the case. It will be a time-consuming and more expensive process, and you should seek legal advice first;
4. If you suspect misconduct such as fraud or misrepresentation on the part of the bank, you should report the matter to MAS. MAS does not resolve contractual disputes, but will investigate cases where the bank does not follow regulations in order to prevent such cases from occurring again.

Always be one step ahead – stay vigilant and be proactive. You can avoid getting into a banking dispute by taking steps to protect yourself against scams or fraudulent charges. Monitor your bank accounts closely, and do not provide personal bank details to anyone. Set up transaction alerts and regularly check your card statements; if you notice transactions that you did not make, inform the bank as soon as possible.

However, if you are already involved in a banking dispute, and it is a particularly complex one, you should seek advice from an experienced disputes lawyer. The lawyer will be able to advise you on the different avenues available to you to resolve your banking dispute, and which avenue is most suitable for your particular circumstances. If you do decide to commence a legal claim against the bank, the lawyer will also be able to represent you in the legal proceedings.