Subjectively, in my opinion, yes, LV bags clearly over-charged customers..but I don’t feel they are anywhere near to “daily robbery”. I don’t see anything wrong with making huge profits from products or services, as long as your customers are delighted with your products or services..

I hope you could take my comments as objective as possible. You dis-allowed me from posting opposing views in your blog, which is a rather sad thing. Opposing comments provide more balance views on the particular subject.

I think this article is too idealistic…you took a very narrow view on what you think is a problem…In fact it is highly questionable that what you think as a “problem” is indeed a problem.

For example:

you think if a company makes huge profits, they are not charging consumers fairly…and they are not so ethical.

but how much is huge? how much is then fair ?

what’s wrong with creating huge wealth (huge profit margins) by doing business, if your customers are happy to pay for your products/services?

Creating Weatlh is what drives most people…creating huge wealth is a dream of many…anything wrong with that? anything wrong with achiving that by selling products/services that give huge margins?

In my opinion it is TOTALLY WRONG to suggest that earning huge profits = non-ethical business behaviour.

As long as no monopoly, no price fixing, and there are lots of competiions, I believe people are happy paying the prices…and we cannot condem the businesses as practising non-ethical behaviours for earning huge profits (margin) out of it.

Mr Tan, I, neverthless, totally agree with the point of your article. Your introductory paragraph, however, does seem to cast a shadow over merchants in general, which is why I guess gtiong#9 gave a clarification. If you were to write to another forum, I hope that you can leave it out. This will make your article stronger!

QUOTE BEGIN
24) Tan Kin Lian on August 11th, 2008 7.37 am
Hi gtiong (#9)

I agree with you that some merchants have made big contribution to society.

The point of my article is the need to observe business ethics. I hope that most merchants and traders adopt business ethics and charge prices that are fair to consumers. They will gain the trust and respects of the consumers.

I also hope that society can promote the ethics of fairness, rather than the pursuit of weath though unethical means.
QUOTE END

http://tankinlian.blogspot.com/2008/08/effect-of-deduction.html

I have an enquiry to make regarding the Effect of Deduction after reading your blog. I took out my policy and I am pretty stunned to see the amount that is written under the effects of deduction.

My annual premium is $3,000 and assuming that I live till 65, it will be a full 44 years. I was 21 when I signed the plan.

Looking at it, Total premium paid is $132,000, total distribution cost is $5468, Non-Guaranteed Cash Value at 5% is 205,600 and at 9% 691,800. Effects of deduction is $882,776. I was not told about the effects of deduction when I signed up the plan and looking at it, I am pretty much being shortchanged for the amount of money that I put in.

Kindly advise on what should I do.

REPLY

You can write a letter of complaint to the deputy managing director in charge of market conduct in MAS, as shown below.
http://app.sgdi.gov.sg/listing_expand.asp?agency_subtype=dept&agency_id=0000008384-

The agent has a duty to disclose and explain this important point to the policyholder. It is shocking that the Effect of Deduction is higher than the Cash Value (assuming an investment yield of 9%). The charges are so high, it amounts to daylight robbery.

http://www.tankinlian.blogspot.com

Thank you Zhummeng for this reminder. I am also an insurance agent…..GOTCHA!!! I was kidding – sorry – I love to kid around! :)

I never trusted insurance agents except for 2 who are very good friends of mine. Both of them are very straight-forward. Both of them do not know each other but both said about the same thing, “The more premium you pay the better the coverage….Can you keep up paying premium long-term? If not, I suggest you pay for lower premiums or don’t buy at all.” My answer was a NO NOT GONNA BUY INSURANCE and I tell you, there were no hard feelings. We are still friends to this day because of their straightforwardness and frankness and also partially I am not their customer. I have friends of mine who go to them because I don’t twist my testimonials.

MAS is aware of churning. But more needs to be done by MAS. MAS need “mystery shoppers” to randomly “test and report”. For this, money is needed and somehow I have a feeling those not even involved in buying insurance will be involved. :/

>>>>Kin Lian: I think that the responsibility for good insurance products should be shouldered by:
> the insurance company who created the “bad products”
> the regulator, who allow the “bad products” to be offered in the market.

Fully agree!

I am perturbed by insurance agents who encourage vehicle mechanics and their customers to inflate values of vehicle repairs, etc. You can say the insurance industry has agents who are cheaters, and the very same agents who encourage inflation. If insurance companies cannot see that, then it is also their loss in the long-run. Once a license of an insurance agent is unplugged, there’s one lesser unethical insurance agent. And the number of unethical agents ousted from the industry will keep increasing, finally leaving only ethical agents to make their money. I am so imaginary! lol

I think that the responsibility for good insurance products should be shouldered by:

> the insurance company who created the “bad products”
> the regulator, who allow the “bad products” to be offered in the market.

A good product is one that meet the needs of an identified group of customers and is fairly priced (and not over-charged).

If the regulator is more active inensuring that fair products are offered in the market, then the insurance company will be forced to keep to the rules, and then the agents will have the good products to sell.

The agent may still sell the product to the wrong people (turning a good product into a bad one). The insurance company should have the means to identify it, and rectify the mistake. They cannot just leave the matter to be unpoliced.

Conclusion: It is important for the insurance company to observe good business ethics.

This sentence can be right….it can also be wrong.

Why do I say lying is RIGHT? If someone asked you if she was fat and you lied, that’s ok! If you’re talking about suppressing your chicken rice recipe from non-family members, no one has objections too. If you want to soften the impact of a broken heart, you may lie too.

WHY I SAY LYING IS WRONG

I’ve seen real estate agents selling houses that had plumbering problems and the new owners didn’t complain because the agent already informed them. They had the house at a very good price which could allow them to spend on repairs. No complaints because the truth was told. If they were kept in the dark and found out the plumbering problems much later cos the agent didn’t tell them, no one’s gonna be surprised if the new oners get angry,

I cannot imagine politicians lying in order to sell their ideas…it’s just all wrong. “Everyone’s doing it” doesn’t mean you’d also have to stoop to unethical ways.

Quote: ‘By the way, thank you Silentwind… it’s just wonderful to have a share of minds here!’

You’re most welcome. Can see you really enjoyed yourself.

This is only half the story. It took them 5 visits to our house (they always had some glitch that prevented installation of MXXTV) before we found out to our dismay that the product wasn’t what we were actually sold. There was no clause in the contract for causing us inconvenience. Fine….

I would have laughed it off too if the organisation did not insist on charging my family for something we didn’t order. I told the organisation we were given durian when we ordered mangosteens, how did they expect us to pay for durian?

Silentwind your “lock” siuation was also one such misrespresentation, Having the lock exhibited at an anti-crime roadshow does not mean the Singapore Police Force endorses it (or going to endorse it) even if the sales person says it’s been endorsed or going to be endorsed. You are right to spot this. Proof? No proof but you are the customer and I think bosses believe their customers more than they do their employees (unfortunately or fortunately depending on whose shoes you’re in). Over-promising has always been a form of misrepresentation and is unethical no matter whether you look at it at from up, down, left and right, keke

Looking back in history, 1 organisation was ordered (by court) to sell their mobile phones (promoted) at the price which was erraneously TYPED into their webpage. Do these people “pay” for their mistakes? Yep….they’ve paid for it already. What a slip-up but slip-ups are no BIG NO NOs in businesses, all the more for people to be careful about what they promise of their products.

It is not wrong/unprofessional at all to say,”I’ll check on my end first.” or “I am not sure of this, manufacture of xxx may have changed – I will get back to you asap on this.”

My ex-employer is another example of being unethical. When asked to give black and white that xxx product is really xxx, my ex-employer told the customer they can’t give it but they can SAY it. What sort of logic is that?

Zhummmeng I was stating it from the legal point of view. Or rather the government’s point of view. A loan shark is legal only when he’s licensed. Example of legalised loansharks – BANKS (they give loans just like loan sharks)! It’s a money-world.

Zhummeng as you have already described they’re (legalised trades, etc) is not without flaws. Unethical practices are not limited to insurance agents alone; even some of the things school teachers do nowadays are unethical. Eg. Not fully investigating incidents and finger-pointing an otherwise innocent student.

It’s not the trade/business/professional at fault, it’s how people conduct their businesses/sales and how the government has not successfully curbed unethical conducts that is the issue. The only “curb” I see now is that it’s harder to qualify as an insurance agent, and so more agents are wary of throwing it all away with just one unethical act. More can be done by the government.

By the way, thank you Silentwind and Zhummmeng, it’s just wonderful to have a share of minds here!

The salesperson and his pitch are besides the true value of the product, and I’d already attached a high value to it at first sight.

Silentwind – the actual VERBAL answer to questions asked,”Yes, it has football etc.” We didn’t look for the service; our doors were knocked on and usually we don’t even bother because there’s an unspoken unwritten rule in our family that we do not entertain anyone without an confirmed appointment. Anyone who has access to our home has keys. That day 1 of my siblings was curious enough to go see who knocked! Mistake!

The organisation was apologetic and called on 3 seperate occasions to apologise after that. So I am satisfied of a proper closure although it doesn’t change the fact that there was a misrepresentation.