Singapore Tightens Social Media Advertising Rules Amid S$913 Million Loss to Scams

New regulations addressing fraudulent online advertisements have been introduced in Singapore. These measures require Facebook, Instagram, and TikTok to verify advertiser identities against government records and prevent advertisements from unlicensed financial firms. Experts consider these steps significant for countering online scams, though they caution consumer vigilance remains essential.

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The recently announced police rules mandate that specified social media platforms confirm advertiser identities by cross-referencing details with official government records. Platforms must also block advertisements from financial services firms without a valid licence from the Monetary Authority of Singapore (MAS). Examining dubious links and promptly removing suspicious content are also required.

In a report by The Straits Times, experts warn these measures are not entirely foolproof. Scammers may still exploit legitimate company advertisements by posing as representatives. Leong Zhen Yang, an associate at IRB Law, advised an MAS licence does not guarantee investment authenticity. A rogue representative or impersonating scammer might place an advertisement. Consumers should confirm specific investments through official company channels.

Associate Professor Hannah Yee-Fen Lim, a law expert from Nanyang Technological University, observed that prohibiting online financial advertisements from unlicensed advertisers mirrors existing physical advertising regulations. She suggested this online extension was long overdue. The delay might be attributed to regulatory and compliance costs, particularly given the rise in online scams.

And despite a recent fall, scam numbers remain high. Total scam losses in Singapore decreased to SGD 913.1 million last year, down from a record SGD 1.1 billion the year prior. Total reported scam cases also reduced by over 27 per cent to 37,308 cases.

Other police measures target online criminal activities. Messaging services must display the country of origin for unsolicited calls or messages, providing a necessary warning. An unknown account's creation date must also be visible, flagging newly established accounts. These services include WhatsApp, Telegram, WeChat, Apple iMessage, Apple FaceTime, Google Message, and Google Meet.

So, IRB Law's Leong also highlighted a new measure requiring unknown contacts to obtain user consent before adding them to group chats or channels. This disrupts a common tactic in investment scams, where groups fabricate credibility through fake mentors, falsified profit screenshots, and testimonials. User consent directly interferes with this initial deception.

These new rules will commence early next year. Non-compliance constitutes a criminal offence under the Online Criminal Harms Act, potentially leading to fines of up to SGD 1 million. Leong suggested advertiser identity verification should involve continuous checks. An advertiser might lose its licence, undergo ownership change, or promote different products after initial checks.

But Leong also pointed out that while new rules focus on paid advertising, scammers may adapt their methods. They might shift to unpaid content, such as regular posts, live streams, influencer endorsements, or direct private messages. He suggested authorities clarify how these regulations apply to less visible methods, preventing scammers from circumventing safeguards.

Leong emphasised no single protective measure works alone, citing Australia's and the United Kingdom's experiences. He advocates an ecosystem approach, combining platform prevention, regulatory insight, swift content removal, banking intervention, and law enforcement. Associate Professor Sandra Booysen from NUS Law concurred, noting a holistic approach involving all stakeholders is required.

• New rules require social media platforms to verify advertiser identities and block ads from unlicensed financial firms.

• Measures extend to messaging services, demanding display of country of origin for unsolicited communications and user consent for group chat additions.

• Experts indicate these steps are significant but not exhaustive, stressing ongoing consumer vigilance against evolving scam tactics.

• Non-compliance with the new regulations, effective early next year, will constitute a criminal offence subject to fines up to SGD 1 million.

Source: ST