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It's not the bank's fault

We got a perfect storm where scammers could take advantage of

Did you read the article in today's newspaper about an elderly woman who lost $100,000 to phone scammers and who would have lost another tranche of $100,000 if the remittance company had not stepped in to verify the second transfer? What was interesting about this story was the way the woman's daughter was vilifying the bank for failing to stop the woman from withdrawing such a large amount from the branch machine, a similarly-looking ATM but with much higher withdrawal limits, saying that her withdrawal history has never been more than $5,000 at a go. This large amount and her age should have raised questions. The daughter has since taken the issue up with the Monetary Authority of Singapore.

I feel very sorry for the old lady to have been cheated like this. But what is wrong with this story? (1) The woman chose not to go to her family when she was "accused" of committing a crime; (2) the woman believed that she has committed a crime in a country where she probably has no connection to; and (3) the woman knows the existence of such branch machines, which to all intents and purposes, may not have been meant for customers like her (truth be told, I didn't know these machines existed, if not for this article. When I tried to Google information on such machines, the search did not return any specific results on them)

So what does this mean?

(1) The woman only got to know about the branch machines from the scammers, who knew exactly where they were located, and probably how much they could get away with without rousing much suspicion;

(2) The woman didn't know her rights and was probably too "ashamed" to have been accused of a crime and wanted to "right the wrong" in as quietly a manner as possible

(3) The woman was extremely trusting of strangers, more so perhaps, than her own family members (and why was that?)

So when all these factors came together, we got a perfect storm of a situation where scammers could take advantage of and get away with $100,000 (and possibly even $200,000). Was it the bank's fault? Absolutely not; it was the situation.

Fundamental Attribution Error

Welcome to the phenomenon called the Fundamental Attribution Error, a cognitive bias which causes one to jump to the conclusion that an internal personality "flaw" has caused the problem rather than the situation. For example, if you were driving down the East Coast Parkway and suddenly a car cuts in front of you, you might let go certain expletives and call the driver a "jerk". But what if he was rushing a sick child to hospital and had to drive with all haste? If you had known that, would you still call him a jerk? Probably not. It was the situation that caused the driver to act like a jerk, but that does not mean he was one.

Back to this situation. It was not the bank's fault that the old lady lost the money; it was the situation she was put in. So one cannot say that it was the bank's lack of care that caused the mother to lose the money. If the woman wanted to withdraw that $100,000, she would, regardless of the amount of care that the bank exhibited.

The daughter could say that it took the remittance company to spot the scam; and why not the bank that had much more information on the woman? Well, at the point of withdrawal, there was no problem. It might probably surprise the daughter to know that the bank sees many such cases of elderly people suddenly withdrawing a large sum of money for various legitimate reasons; much more common than remittance companies see. And at any rate, the alert is better raised at the point of remittance, rather than at the point of withdrawal. As such, the daughter would have a better chance "blaming" the first remittance company, than the bank. But she chose the bank for reasons we shall surmise later.

That is the Fundamental Attribution Error at work.


The Fundamental Attribution Error works in all situations. When we judge a person or an organisation without really looking at the situation and diving deeper into the cause of it, labelling a lack of internal fortitude in that person or organisation, we are guilty of the Fundamental Attribution Error. It is so common that you can see this happening in all situations, in all levels of the organisation and in all walks of life. There are several reasons for this:

(1) people are very quick to judge from a self-righteous perspective;

(2) it can be a cultural issue - especially for a very individualistic society like Singapore;

(3) the perpetrator draws attention to itself (the bank is a favourite scapegoat for many "problems")

(4) we react to the first inference, and don't think deeper

In fact, in this case, we can see all four of these reasons coming together to form another perfect storm. The daughter is most probably in denial of the facts of the case, and choose to blame a party that many people like to take potshots at. More likely, she is looking for restitution from the bank; and trying to wrangle up these accusations to make their case. This can be surmised by their report to the MAS and trying to go to the Financial Industry Disputes Resolution Centre for redress. Ultimately, the daughter is clutching on straws. The issue is not the bank's, and I will take exception if there is a finding against them. Whether the bank wants to offer something as goodwill compensation is up to the bank, but to say that the bank will need to make any form of restitution for the lost money due to lack of care, is a real stretch. The money was lost due to the many factors above, none of which were the bank's fault, and perhaps the family needs to see just why the old lady didn't go to them and discussed this with them in the first place? Therein will lie the reason for the lost money.

How do we deal with Fundamental Attribution Error?

The first thing we need to do is to stop jumping to conclusions about a person's (or organisation's) character. Even if we have a point of view about that person (or organisation), and even if the person was really a jerk, we cannot always conveniently blame the jerk for all the world's problems! Instead, we need to look at what really is the issue here, and the issue in this particular case, is the remittance of the money to the scammers. That was when the crime was committed by the scammers, and not the withdrawal of the money. So that is the event we need to scrutinise.

Next, we need to peel the situation layer after layer to understand what was really happening. Identify all the connecting situations. It is good to use the Haddon Matrix to help. This matrix looks at the circumstances pre-event, during event, and post-event. This will allow us to see the forces at work before the remittance took place (remember, the issue is the remittance of the money to the scammers, and NOT the withdrawal of the money), the forces when the remittance was done, and then the actions taken after the event.

Finally, we will identify what really is the underlying cause and ways to improve/prevent that. As mentioned, it is quite odd that the old lady prefers to trust strangers than to raise the matter to her family members. That is one area to look at. Other questions abound like: why, after so many calls by the authorities over the many years NOT to succumb to internet and phone scams, do we still hear of this? Is there something more fundamental at work here? And finally, why did the first remittance company not raise the alarm before sending the money through? The Haddon Matrix allows us to uncover all these issues, and allows us to have a clearer perspective of the situation, rather than simply blame the bank.

Time to move on

The family needs to know that, ultimately, the money is lost, and it is not fair to go after the large institution that happened to be there, for restitution. They are not the perpetrators and they certainly were not the main players in the problem (which, I reiterate, is the remittance of the $100,000 to the scammers). It is a bitter pill to swallow, but we can either allow it to press us down, or we can do something about it. Perhaps the family can start a social mission to educate the elder folk; maybe they can use this emotion to do some good (rather than trying to go after the bank) and turn the loss into a profit like writing a book, and selling it; maybe they could work with the authorities in China and try to work to recover the monies. There are many ways to channel the negative emotion - which, I am sure, are many - but they should do so constructively and not simply take the easy way out. The next positive step is up to them; and they shouldn't compound the mistake with another one, and portray yourselves as sore losers. You have lost; time to move on.


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