Establishing compensation funds for fraud victims is challenging to implement, because fraudulent funds are often mixed with other criminal proceeds, making it difficult to accurately distinguish and distribute funds. Funds may also be abused by fraudsters, which will in turn contribute to fraud activities.

Sun Xueling, Minister of State for the Ministry of Interior and Ministry of Social and Family Development, made the above explanation when Congress responded to a question from Workers' Party Aljuni Ghetto Constituency Councilor Yan Yansong on Friday (February 28).

Yan Yansong asked whether the government would consider setting up a compensation fund for victims of fraud.

Sun Xueling said that the amount involved in the case recovered may be mixed with the proceeds from other non-fraud activities. Therefore, in actual operation, it is difficult to allocate and track which funds should be returned to the victims and which should be confiscated by the state.

“In the funds recovered by the anti-fraud center, we cannot accurately determine whether all amounts are related to fraud through investigation. Many criminal gangs also involve other illegal activities, such as illegal lending, etc. Therefore, the funds recovered do not only include the proceeds of fraud.”

Further reading

Nearly 2.8 billion yuan of assets related to the money laundering case were transferred to the country

Nearly 2.8 billion yuan of assets related to the money laundering case were transferred to the country

Losses in local fraud cases increased by 70% last year to 1.1 billion yuan in cryptocurrency scams have become a new trend

Losses in local fraud cases increased by 70% last year to 1.1 billion yuan in cryptocurrency scams have become a new trend

In addition, fraudsters may also use cryptocurrencies and other means to deal with illegal gains, making capital flows more complicated and making tracking more difficult.

Singapore Police Force released data on fraud and cybercrime throughout the year in 2024 on Tuesday (25th). After the total loss of fraud fell the year before the year, the loss amount last year surged by 70.6%, from 651.8 million yuan to 1.112.4 million yuan, marking a record high.

However, the authorities recovered only 182 million yuan, accounting for a small part of the total loss of fraud.

Sun Xueling pointed out that since the amount of recovered is much lower than the victim's losses, if a compensation fund is established, “the persons claiming will be far more than the recovered funds.”

She also added that if the fraudsters learn that there are such funds, they may try to exploit loopholes and use other methods to defraud the funds of the funds and “get back” some of the fraudulent income.

“The government is considering various proposals to find out the best way to compensate victims.”