Beware of scams
Thursday, 4 September 2008, 7:40 am | 1,249 views
Tan Kin Lian / Columnist
Someone sent me a link to an article in an English newspaper about scams recently. I looked through the article and found that some of these scams are common in Singapore. They include the following:
Phony jobs
This is usually an “advance fee” fraud where you wire money in the expectation you will get a job, usually one offering substantial money for “part-time work from home”. The money transmission may be called a “test”. Fraudsters often use the names of legitimate companies and “guarantee” earnings.
Mail-order brides
This is really sad. Scamsters look for lonely people - usually men - and offer them love on the internet or by post. The “beautiful” women, who often claim to be Eastern European or Asian, don’t exist: what victims see are pictures copied from entertainment, fashion or celebrity magazines.
Once hooked, men are asked to send their lovers money for air tickets, cash for “the family” or even amounts to pay off old boyfriends. To keep them interested, the targets may be sent sexy pictures or intimate clothing items. Victims are strung along until they realise they have been stung - or until they run out of money.
Investments
Persuasive salesmen cold call investors and try to persuade them to buy shares or commodities on the promise that “they will double or treble your investment in three to six months.”
The sales pitch may have a pinch of truth, but what is on offer is phoney. Investors are often shuttled between “analysts” and “senior analysts” but these titles are meaningless.
The shares are usually in companies that don’t exist, while those bets on currency exchange rates or heating oil are never made - often the salesmen tells victims they have quick gains, to encourage them to invest even more.
Nigerian scam
When the “widow” of a former Nigerian dictator emails to ask your help in getting access to the millions that happens to be locked in a bank account, most treat it as a joke. Using various names, this scam has been around for at least 30 years. While the dictator was real, and the fact that those in corrupt regimes stashed away money in offshore banks is not disputed, the widow is a total phoney - as is the promised bank account.
Land banking
Here you are persuaded to pay a large sum of money for a tenth of an acre in a field - on the promise the land will soon receive planning permission and soar in value. So far, no land banking site has ever gained the building go-ahead.
Most land sold in this way is green belt or zoned for agricultural use only. But land bankers seize on every government statement about the need for more homes to stress that this means that it is certain that the site they are selling will soon be covered in houses - like almost all scams, this relies on an element of truth.
A few more
I posted these scams in my blog (www.tankinlian.com) and received a few more contributions.
Oil Pods
This company used to advertise in many seminars and investing seminars. It appears that they and their investors were conned. The company has filed a Motion for Appointment of Receiver to administer and manage the business affairs, funds, assets and other properties for the protection of the investors.
Sunshine Empire
Recently the Sunshine Empire’s finances were frozen due to investigations. My uncle was quite sad over it as he had made some investment in it.
Stronger Regulation
I believe that there is a case for stronger regulation for the protection of small investors. I suggest the following measures:
> It should be a crime to cheat people or to mislead people. The regulator should take action against people who create these scams and should be ready to prosecute these promoters in court.
The courts can decide if it was a genuine business or the promoters had the intent to cheat the public. I have high respect for the former and current Attorney General of New York City as they are prepared to take action against businesses which were involved in questionable practices.
> Special attention should be given to businesses that promote the investment schemes in the main stream newspapers. These advertisements should be put to a higher standard of scrutiny by the authority.
If the authority is not able to decide on the fairness of these advertised products, how can they expect the small investors to make the judgment?
The small investors are likely to believe that an advertised product has gone through some scrutiny by the authority. If the authority is not sure, they can ask questions of the advertiser, or they can appoint an expert to give an independent opinion.
The authority can also ask the consumer association to engage the experts to give an opinion. The opinion should be displayed in a website for easy reference by the public.
Conclusion
It is the role of the authority (i.e. Government) to protect the consumer from being cheated by scammers or even by legitimate businesses that offer complicated financial products that are unfair to small investors.
It may be difficult for the authority to draw the line between what is fair and what is cheating, but this difficulty should not give the reason for the authority to abdicate its responsibility. They should make the initial judgment and leave the final decision to the court.
I concede that some of these scams will be difficult to detect and prevent, and that the problem will not be entirely eliminated by stronger regulation and enforcement action. But, pro-active action by the authority will go a long way.
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actual in a “controlled” singapore… i do not know why so many official scam companies exist…
eg.
timesharing
mlm companies
bogus auctions companies in heartlands (used to be a lot 5yrs back now i’m not sure)
also ever wonder how come so many girls can come to sg on social visit pass and work as hookers/dancers/singers to such extent that some pimps can even give you a forecast of what’s coming ahead…
are all these sanuctioned by i-ban-100-porn-sites-n-fix-opp-party singapore?
Thank you Kin Lian for this article.
What about the questionable structured products that are being advertised in the newspapers and marketed by the stockbrokers and banks?
Many investors are locked in for man yyears, and have to wait until the maturity date to get a miserable return. If they cash out earlier, they will suffer a big loss. Are these also called “scams”?
They are created by respected international banks, which I shall not name. But these so-called investments, while being sophisticated, may be cheating the consumers. My auntie was pushed into buying the product, only to regret later - but it is too late.
Mr. Tan,
What about notorious, border line cases such as time share investment?
JuToh - no, I don’t think you can call structured products “scams”. These products have to be approved by the authorities. The terms & conditions and/or prospectus are published. You already know that there may be penalties if you cash out early. This is no different than if you place your money in long-term fixed deposits and decide to break them earlier.
Most of what TKL appended are downright frauds and scams, and some involved misleading terms & conditions, misrepresentation and arm-twisting sales tactics.
Hi Kin Lian,
I agree with you. I think as Singapore brings in more foreigners and opens itself up even further technologically, we will see more of such things. For myself, I’ve been receiving so many emails from those ‘African’ scammers. Now, I even receive some from the Philippines too.
I think most of us are aware of and are smart enough to see through such con artists but I am more concerned about out regular ah soh and ah pek. Some time back, the grassroots organisations did embark on awareness campaigns in the heartlands to warn heartlanders about such scams. I’m not sure if they’re still on-going, though.
Nonetheless, more should be done to curb such scammers!
“4) T on September 4th, 2008 9.32 am JuToh - no, I don’t think you can call structured products “scams”. These products have to be approved by the authorities. The terms & conditions and/or prospectus are published. You already know that there may be penalties if you cash out early”
Really ? already know ? Well, maybe for those financially savvy like you. Do not kid us friend. The goods coming out used to be faster than the channels of education that is being afforded in the mainstream. I am old my friend, got the chance to really breathe in nice and clean air in the old days and see plenty of stars in the night sky. Now plenty of traffic and as for the stars I will be very lucky if I can see ten clear bright blinking ones during any night.
As for information and education, now at least it is better where almost everything gets to be discussed especially in the internet where the younger generation gets to enjoy and in which I believe you are one of those. What about old uncles and aunties who do not even dare to meddle with the keyboard and are extremely naive to take every skillfully attractive phrased words (with pages of terms and conditions and hidden clauses enforceable when signed on the dotted lines) as god truth.
“These products have to be approved by the authorities.”
You think that the authorities are angels sent from heaven. The authorities also approved the banning of chewing gums but does not disapprove of people drinking beer and smoking cigarettes.
Hi T (#4)
You said that the structured products have to be approved by the authorities. The terms & conditions and/or prospectus are published.
I have spoken to many people who bought the structured products, including members of my family, and they have no clue about the product. They were pressured into buying the product and given all kinds of verbal assurances, that are different from the statements in the prospectus.
I have read some prospectus and I have no clue about what the terms are. Mind you, I am financially savvy.
My friend did an analysis of many of these products and told me about the underlying terms. In my view, many of these products offer poor value to the consumers. A knowledgeable person will NOT buy the product.
So, I agree with JuToh. I believe that many people who have invested in the product also agree with this statement.
The authority seem to take the approach that so long as the terms are disclosed in the prospectus, it is “investor’s beware”. I hope that they will stop the marketing of these products to the ordinary people, as it is unfair for these people to be exploited in this manner.
Hi sgcitizen (#1)
I agree with you on the Timesharing scams. Many people have been caught by these dubious marketing practices. They should be stopped.
If someone wants to market timesharing in a legitimate way, they have to be approved by the authority. I believe that the authority has a responsibilty to control thse activities.
structured products are a completely legit product. the only problem is, most people don’t know what they’re getting into.
http://flaneurose.blogspot.com/2008/07/dubious-appeal-of-structured-products.html
In Hong Kong, if you want to place a newspaper advertisement promising unusually high returns, they want you to show proof. Also, they require you to show proof of your company’s registration, office rental agreement (to minimise the possibility of fly by night) and to indemnify the newspaper for any potential complaints/lawsuits.
The newspaper company will refuse the advertisment if they feel is a scam.
What about life insurance scams? Are these legal scams?
I am sure consumers must been approached by insurance agents at roadshows to buy dubious schemes cooked up by hungry greedy unscrupulous agents..
You must been approached to buy what they call “buy one get one free” package at MRT stations and shopping malls.
The package is that you need to buy an anticipated endowment and refunds or cashbacks or coupons from this endowment is drained off to buy a limited payment whole life product…This appears legal because authority is not alerted yet but it is actually churning which is illegal.It is a fraud and many consumers have unwittingly fallen victims to this fraud..because the insurance agents are their friends or relatives and some consumers buy because of brand name .
A variation of this scam is buy a single premium ILP and consumers are advised to draw down a certain sum yearly to pay for a limited payment WL regardless of market conditions.
It is no rocket science to see that the schemes are scams with one motive to make the consumers pay 2 commissions to the insurance agents. The consumers are unaware that they have been fleeced and that it is illegal. As you know consumers are clueless about life insurance and their ignorance and naivety and trust have been exploited by salesmen and women disguised as financial consultants…
It is getting more rampant as the year is coming to a close and there are companies with year end contests which require them to earn more commissions to qualify for incentive trips and of course the mdrt. cot, tot which are based on earnings and commissions and not how many people they have helped.
So the frenzy is getting feverish i advise that consumers avoid these places and learn to say ‘NO’ otherwise you will be cheated. .
Everywhere there are scams but the unsuspecting life insurance scam are just at our doorsteps with the mobile predators seeking out victims door to door.
/// I have spoken to many people who bought the structured products, including members of my family, and they have no clue about the product. They were pressured into buying the product and given all kinds of verbal assurances, that are different from the statements in the prospectus. ///
TKL - yes, therein lies the problem. The products, per se, are not scam. In your example, the salespersons are at fault. If the verbal assurances are different from the printed statements, then they are misleading the investors.
These products are meant for sophisticated investors and not for the moms and pops. If your family members had consulted you, then they won’t be so clueless.
And if you are clueless about what the terms are, then why on earth buy them and then blame them. Unless they put a gun to your forehead and ask you to sign.
Come on fellows. On the one hand, we are accusing the authority of being a nanny state, and now we want the authority to protect us from our own folly? In this instant, caveat emptor is very appropriate.
“12) T on September 4th, 2008 2.04 pm
And if you are clueless about what the terms are, then why on earth buy them and then blame them.”
Hey you are right, if clueless why buy. Becuase there are still gullible people who sometimes buy on genuine good faith on the representation of salesperson (e.g could even be someone who they think to be trustworthy) and sometimes on the good & big name (yah good name hoh) of well known institutions.
That is why people (oops only the savvy ones lah) are now more suspicious in their day-to-day relationship with almost anything and anyone. Gracious hoh ? Get scr***ed and yet have to bite your tongue to listen to bull****.
“Come on fellows. On the one hand, we are accusing the authority of being a nanny state, and now we want the authority to protect us from our own folly? In this instant, caveat emptor is very appropriate.”
Yah lah. You are right. No nanny state. But most things must work hand in hand lah. Mainstream channels must be open / freer for robust (not sterile) exchange of information (discussion) to spread fast enough for the populace to get educated.
Mr. T,
if your old folks consulted you it might not happen but the bank or insurance “consultants” weren’t stupid to let their victims consult experts before making decision.They go for the kill and make sure their victims don’t escape.
Secondary, how many are experts like you? The structured products are so designed with one objective , to make it as complicated that you don’t even know
how they work. Some consultants don’t even understand let alone the consumers.
Caveat Emptor is dangerous and it is like putting a gun in the hand of the consultants to rob clueless consumers in broad day light and get away scotch free.
It is like saying to the customers , ” you buy is your own business if you don’t check for defects or frauds”. For insurance and financial products , how to check and how to test? We can test drive a car or feel or run an appliance before buying but can we with financial products? On top of it there is a warranty for defects. Do we have warranty for financial products other than 7 or 14 day freelook?
Financial products should be controlled like drugs and medicine. The products must provide “indications and contra indications” and who these products are suitable, age and gender.No misleading advertisement and it is not supposed to
be in “persuasive” language but in informative language and disclose every thing, the bad and the good.
Marketing is no difference from selling. It s objective is to make customers buy and very often the advertising copies border on untruths and ambiguity to confuse.
Every consumer is clueless and therefore foolish when it comes financial products. If there is no protection against unscrupulous insurance agents and bank consultants for frauds and malpractices I can imagine a chaotic market place. You don’t need a nanny but many others do need one badly.
CASE and FIDREC will tell you except MAS which is always mumb and dumb
zhummmeng, just like those timeshare and MLM schemes, if you can prove that your have been misled or coerced into buying, I am sure you can complain to the relevant authorities and seek redress.
I have a correction. My blog is
http://www.tankinlian.blogspot.com
Hi JuToh (#16)
Can you quote some examples of the actions taken by the Financial Services Authority of the UK against the financial instututions and their agents for misconduct? What types of misconduct? Are they similar to the misconducts in Singapore?
‘Land banking
Here you are persuaded to pay a large sum of money for a tenth of an acre in a field - on the promise the land will soon receive planning permission and soar in value. So far, no land banking site has ever gained the building go-ahead.’
This is interesting. Do you mean to say that every land banking consultancy set up here in Singapore is a scam? There are quite a number, you know. And about the last statement. That is quite a statement, and if factual, should be taken into serious consideration by the many persons who’ve made investments in land banking.
Dear Kin Lian, JuToh et al,
Perhaps an example will make it clear, and show how ridiculous some of the objections can be.
Start of misquote:
I have spoken to many people who bought the hybrid cars, including members of my family, and they have no clue about the product. They were pressured into buying the car and given all kinds of verbal assurances, that are different from the specifications.
I have read some of the specifications and I have no clue about what the terms are. Mind you, I am mechanically savvy. But I still don’t know how the internal combustion engine work, let along this new structured product called “hybrid car”. On the specifications, it says petrol consumption is 25 km/litre. But the car salesman verbally told me that it can go up to 50 km/litre. After a few months of driving, I realised that it only achieved an average of 20 km/litre.
Marketing is no difference from selling. It s objective is to make customers buy and very often the advertising copies border on untruths and ambiguity to confuse.
Every consumer is clueless and therefore foolish when it comes financial products. If there is no protection against unscrupulous insurance agents and bank consultants for frauds and malpractices I can imagine a chaotic market place. You don’t need a nanny but many others do need one badly.
End of misquote
Therefore, we should ban the selling of hybrid cars, or any cars for that matter, for oftentimes, the consumers do not get what was promised in the product specifications.
Cars, especially those new structured products known as “hybrids” are downright scams and should be banned in Singapore.
Selling is telling some truth with a lot of lies thrown in to enhance the persuasiveness. If you don’t believe just listen to any insurance agent’s spiel and compare it to the quotation and benefit illustrations.
The problem is lies sell. People like to listen to ‘good things’. Good feeling is important. It doesn’t matter they are lies at the point of sale…
You can see all the cases brought to light the customers were conned.
Go to the any roadshow you notice the posters are misleading. At ntuc roadshow
you can see a big poster that screams “$5000 guaranteed”. It is misleading. It is too good to be true. if it is, it is.
Hi T (#19)
How many people buy hybrid cars? Perhaps a few dozens. Are the hybrid cars really that bad?
How many people buy life insurance and structured products? Maybe 50,000 or 100,000 a year. Are these products bad? Many of them are.
Do not use the hybrid car to justify the bad practice in the marketing of financial products.
There are good financial products. They are called bank deposits, unit trust and bonds. They are transparent and give fair value in relation to the risk. I wish to promote these products.
Kin Lian - this is very simple really. If anyone does not understand any product, whether it is structured product, or car or slim 10, then he or she shouldn’t buy it. Period. Even Warren Buffet does not invest in companies whose products he does not quite understand.
100,000 people buy insurance products - what’s wrong with plain vanilla insurance products?
Hi The (#22)
Do you know how much of premium is being taken away from the policyholder on a whole life, endowment or investment-linked policy?
It can be up to two years of the premium. If the annual premium is $300, about $7,200 of your savings is taken away to be used to pay the agent and other marketing expenses.
Another part of the premium is used to buy the insurance protection. The remainder is then invested to give the maturity benefit.
The deduction of “two years premium” is very high. In other countries, the authority restrict the amount that can be taken away from the unsuspecting policyholder.
This is what is wrong with “plain vanilla insurance products”. They give a poor return to the policyholders. More than 90% of the100,000 people are not aware about this fact.
Note: There are some products where the deduction for marketing expenses is only half a year’s premium and not two years’ premium .This gives a fairer value to the policyholder.
/// This is what is wrong with “plain vanilla insurance products”. They give a poor return to the policyholders. More than 90% of the100,000 people are not aware about this fact. ///
There you go again - wanting the cake and eat it too. To me, insurance is, as the name so clearly suggest, is for insurance purpose - mainly or solely. If you want equity link or other fanciful features to have some kind of return, or enhance your return, then caveat emptor. I thought you are an insurance man. Now you are acting more like a financial engineer. How about a plain insurance and put whatever excess funds you have into warrants, options, futures or hedge funds where the return can be exponential (and likewise you can lose your pants).
What I find amusing in this thread is that people are confused as to what they want.
1) Don’t want nanny state to regulate everything, and still want authority to act if things go wrong, or so they claim they don’t understand.
2) Want insurance, but also want better return. The short answer is - higher return means higher risks. Period. No free lunch in this world.
Bottomline is. If you do not understand what has been promoted to you - then don’t buy. You want to protect your life or against chronic diseases, then buy insurance against those. Forget about structured products. Forget about equity-linked products. Forget about the bells and whistles.
My 95/5% rule tells me that 95% of consumers are clueless, gullible, naive, trusting and often victims of scams and suckers. It is because 95% of the insurance agents are not qualified, incompetent, dishonest, unethical and only know product pushing and they know that 95% of consumers are suckers.
How to change the ratio?
If the 95% of the insurance agents are interested to change to be trusted, qualified and competent , they must sincerely and constantly upgrade themselves with the consumers’ interest in mind and not the commissions. Next to change is to become honest, ethical, always bear in mind the consumers’ needs are their focuses and have this burning desire to deliver the best outcome for the consumers.Have a conscience to guide you.
For consumers, don’t be a fool, gullible and close both eyes and have light ears when you engage an adviser. Remember your brothers and sisters or relatives or friends are not necessary competent and honest. You may think that they will not harm you . They won’t but they may err. Therefore subject them to stringent test, they are suspects, check their credentials, without the correct credentials they are likely not competent. Even they are honest, without competence they can be more damaging and the outcome more disastrous.The people you trust most may be the worse adviser. Deal with them at arm’s length always .
The 5% of the consumers and advisers, they are comfortable with each other. They are the professionals. These 5% consumers know how to get the best. They engage the best, they don’t DIY because they know they are not competent to advise themselves. They leave their finances in the hand of the best.
The best advisers are qualified and competent. They serve a handful of cleints. They don’t have time for the “tom ,dick, harry, jane, mary and lucy” type of consumers who think they are smart and savvy, who can utter words like whole life and endowment therefore think they can do self analysis..
Heed the advice of Suze Orman, the next time you find your adviser cheating on you, change them. Look for a third party to check and review what you have bought just in case. It serves you well to be cautious.
“Bottomline is. If you do not understand what has been promoted to you - then don’t buy. You want to protect your life or against chronic diseases, then buy insurance against those. Forget about structured products. Forget about equity-linked products. Forget about the bells and whistles.”
If it is so simple. Then we would not have to end up discussing this over here in this site. A lot of people may not be so lucky to have the genes to understand that all these products are not so simple as they seem. Yes, you may say hard luck, no free lunch anyway.
If everyone of us has the fortune to be even be 1/10 of Warren Buffet, you can safely say that a lot of financial products have to go out of business. Warrren Buffet is Numero Uno.
Dear Tan Kin Lian,
I agree with you that regulations must be tighten. I also strongly agree with your suggestion:
“Special attention should be given to businesses that promote the investment schemes in the main stream newspapers.”
Selling Timeshare to be controlled / regulated. And also to look into the landbanking scam.
Discuss yes. But legislate and regulate? No.
You don’t need to be a genius to avoid the real scams. Just some commonsense and advice from the right people. Are you a victim? I don’t think so.
Many fell prey because of greed and fear. The Nigerian scam and “congratulation, you have won the lottery” scam are so obviously scams, and yet so many people are taken in every year.
You cannot legislate against stupidity and greed. What so difficult about not buying something that you are not sure about? Do you need special genes for that?
We are discussing this because one is born every five minutes…
How many knows that landbanking is a scam???
You cannot base on common sense to say something is a scam…it takes time and efforts, so regulators should participate in these checkings…they have the best resources.
Okay guys, I give up trying to get you guys not to foolishly give away your money to strangers touting great schemes that will make you rich quickly. I also noticed that a lot of you have so much money that you are willing to throw them at strangers.
So, why don’t I be your financial adviser - free of charge? BTW, I have just discover the following great investments:
1) Company A has just found a way to use water instead of petrol or diesel for your cars. Fantastic prospects given the high petrol prices.
2) Company B has just discovered the alchemist dream - how to convert metal into gold.
3) You have just struck the first prize in the Spanish Excreta Taurus lottery. To claim your Euro 500 million prize money, please send me S$5 million as administrative fees.
What can regulators do?
The regulators have to be pro-active. If investment schemes are advertised in the newspapers or circulated, they should ask questions from the promoters. This act alone, will be sufficient to make the scammers run for cover.
Many landbanking scams and dubious structured products, promoted by establised companies, will disapper from the scene, if the regulators ask some questions. Even the high cost life insurance products will be withdrawn.
The regulators cannot do much with e-mail scams such as the Nigerian scams, where the promoters cannot be traced. But, the regulators can publish advisories in the websites. The public can refer to these authoritative sources.
The regulator is, of course, worried that they might be blacklisting a good product. It the product is a good product that is valuable and fair to consumers, the promoter should find it quite easy to produce additional evidence to convince the regulator about the merit.
Our current problem is big because the regulator failed to discharge their duty to protect the public interest. If they take a pro-active approach, they will learn how to make the right decision. If they make a mistake, they can correct it.
We need a new approach towards re-regulation.
i want to see exciting politics
singapore must have democratic society
Many of these scams succeed by playing on people’s fears, greed and vulnerabilities. Pause and think first. If it’s too good to be true, then it’s probably a con job in the making. There are times even intelligent people could get con.
http://oneworldtalk.freeforums.org/international-fraud-t1541.html?highlight=international%20fraud
Government regulation would help to define the legal boundaries. However, ultimately, the individual has to take responsibility for any personal decision whether or not to bite the bait and endure the consequences.
Hi #28. T.
Below is a story of a scam, the victims are ‘genius’…yet they fell prey .
Of course, you wouldn’t have fallen for it.. You have special scam detector and it protects you but not the rest… Share with the ‘fools” below how you managed to stay immuned.
Award-winning poet Anne Fairbairn - the only granddaughter of Australia’s fourth Prime Minister, Sir George Reid - has fallen prey to a different version of the Nigerian scam.
She is a perfect example of the type of person targeted by internet fraudsters.
Fairbairn, who was made a Member of the Order of Australia in 1998 for her services to literature and work involving building understanding between cultures, doesn’t know much about technology and rarely uses a computer or mobile phone.
In July she received an email, purportedly from her email provider Yahoo, asking her to confirm her account details including her username and password. Unaware the email was bogus, she gave over her details and her account was hacked.
The scammer, posing as Fairbairn, then emailed all of her contacts saying her money had been stolen and she was stuck in Nigeria, urgently requiring $2500 to be transferred via Western Union.
Some of those who received the fake cry for help included distinguished figures such as retired judges, lawyers, ambassadors and senior academics. Fairbairn does not know how many people sent money because she only has email addresses for many of her overseas contacts, which were lost when her email account was hijacked.
“Being an idealist - and I always have been pretty naive - I trust everyone … I just didn’t know it was possible to be a victim of this sort of thing,” she said.
Fairbairn has filed a report with police but said she thought the investigation was moving slowly. Western Union, which earns fees when scammers use its service, is still allowing money to be sent through to the scammer despite being informed of the ruse, Fairbairn said.
Western Union spokeswoman Connie Yip said the company did its best to educate staff and consumers about fraud but it was not a “policing agency” and often could not prevent fraud because customers do not give transactions details for privacy reasons.
“It is also the consumer’s responsibility to treat every financial transaction with care - to protect themselves and their hard-earned money,” she said.
Fairbairn is worried that some of her friends have or are still sending money to the fictitious Anne in Nigeria and perhaps even having continuing email contact with these criminals believing it is her.
She wants people to know of her experience in order to warn people to always be “very, very vigilant” when using the internet
zhummmeng,
If you say she’s a genius, then it must be so.
Actually, this story just proves my point - you cannot legislate against stupidity and greed. No matter how good the protection is, or how ridiculous the scam is, somebody will fall for it.
As quite a few have said here, if it is TOO GOOD to be true, it usually is too good to be TRUE.
Ignore every single email you receive asking you to send money to claim lottery prizes or to act as beneficiary to sums of money left by deceased persons in their will, etc. (The case of Anne Fairbairn is unique though, and will need highlighting by the authorities concerned for greater awareness.) I’m quite sure these fraudsters are part of criminal gangs in African nations working closely together with the government authorities there. They probably have some kind of training academy to produce those who commit what are called “419″ scams and equip them with authentic-looking (fake) passports so that they can travel all over the world, commit such crimes and worse, and return back to their home country after their imprisonment (that is, if they’re caught) to retrieve their real passports (and identities) from a drawer at home. They retire with a clean record back home. Talk about rogue special agents. Hordes of them trained by the authorities themselves in Africa. Next time you receive any of these scam messages, you might want to try replying them in a sincere manner, that is, lead them on (and talk cock sing song) but never ever send a single cent.
T? You haven’t read the story carefully. Neither Fairbairn nor the victims sent money in the hope of receiving greater sums of monies. The victims were victims of a hoax from which the fraudsters profited. This particular scam is a cross between the conventional “419″ scam and the local kidnap/emergency scam.
Can the authority do anything about the scam that is raised by Fairbairn?
Here are the things that the authority can do:
> the can take pro-active action to investigate
> Interpol can be asked to come in
> Western Union should be asked to provide some data about past transactions
> Western Union can be asked to bar further remittances into certain accounts, until this matter is cleared
I believe that pro-active action can be a big deterrent. It may or may not lead to arrest. But it will certainly make the criminals know that life will not be easy to cheat people.
At present, most authorities do nothing and point fingers to “other authority should take action” or “consumers should be more savvy or wiser”. This is when scams can continue to proliferate.
What are the authorities for? They seem to want to earn big salaries and are not willing to discharge their responsibilities.
914 - yes. And have you read what I wrote carefully? I said you cannot legislate against STUPIDITY and greed.
/// “Being an idealist - and I always have been pretty naive - I trust everyone … I just didn’t know it was possible to be a victim of this sort of thing,” she said. ///
The sentence above is a self confession and says it all. Unless she is living in her ivory tower, she would have known or read in the papers about official sounding emails asking for bank account details and all those phishing sites.
A fool and his money are soon parted. And add GREED and STUPIDITY to that adage.
Hi T (#40)
I agree that we cannot legislate agains “stupidity”.
But, we can take pro-active steps to:
> legislate against cheating and scams
> investigate
> prosecute
It may be difficult to catch some types of scams, but the authority must be seen to be pro-active in dealing with these infringements. They cannot stand on the sidelines and say “don’t be stupid”, “buyer’s beware”, “you should know”.
The authority can act on their own, or empower other organisations (such as the consumer association) to take these actions with their blessing and financial support.
I think if the fraudsters are operating in, for instance, Singapore, a lot can be done to trace and nab them. There are several success stories of arresting 419 scammers in Singapore. But if you’re talking about a case where monies have been transferred to places like Nigeria or other African nations, there’s going to be a huge problem. Not that no authority have never tried sending investigative personnel over. Apparently, various law enforcement agencies like MET and FBI have, and they meet with various red tape and bureaucratic procedures designed to impede the investigative process, until of course, in some instances a bit of money itself is handed over. Police resources are not infinite, you know. The cost of investigations in such cases usually exceeds the loss incurred by the victims. If nabbing the fraudsters sounds difficult, retrieving the criminal profits is even more difficult. The receiver at the other end is only one of several fraudsters whom he is working for, a bit like a “downline”, and monies received are quickly distributed to parties unknown even to the recipient. Bottomline: Do not fall for the scam. Do not send money over.
T? I can’t read you more carefully than I have been doing. I doubt if Fairbairn revealed her email account details toward the expectation of receiving monies.
Well, 914 - what do you think can be done to prevent more of such Fairbairn cases?
I think the way to go is to generate public awareness on the case, and to create several hypotheses from this particular case to pre-empt against such scams. I think the only way is prevention, creating more and more public awareness seems the best way.
And what do you think can be done?
914 - we are in agreement here.. My position is that we should not simply resort to regulation and more regulation. Create awareness - definitely. Which was what I have been saying all along - caveat emptor. So, to make consumers make better decisions - public awareness is key. And I think this site is starting on a very good first step. This article by Tan Kin Lian is a good start - listing out all the known scams out there - some of which may not have hit our shores yet.
But despite many, many instances reported in the press, many people are still taken in by the Nigerian scams. One key factor is greed. The other reason could be they have missed out on the previous write-ups about these scams. So, the only solution is on-going publicity.
Some people say, “don’t regulate”. This allows the “experts” to design products that skim off unsuspecting customers. Caveat emptor does not work. This website is not enough - how many people read this?
I say, “we have to regulate against unethical and dishonest conduct” and “take pro-action to prosecute”. It is the duty of MAS to protect the consumers from scammers. It is not sufficient to rely on “Caveat emptor” as too many people have been cheated.
Take the case of public security. There are laws to define what are unlawful behavior, i.e. to steal, harrass, vandalise, bully. There are policement to enforce the law. Even in freedom-loving America.
In the case of 419 scams and other low-profile transnational crimes relating to cheating, it’s just not feasible to spend on sending a team of investigators abroad to trace the fraudsters. And then you have other concerns like jurisdiction and the danger of investigating in a foreign country. So enforcement authorities might rely on Interpol for instance– but in the end, it’s really about whether enforcement authorities in places like Nigeria (and other African nations) can, or want to, investigate into the fraudsters there. Might not be feasible to them. Or might be feasible, depending how you look at it. After all, the fraudsters might be able to offer something extra to their monthly salaries. Knock on a few doors, show the Interpol “warrant”, make a few threats, fill their pockets up with some of the cash the victims have sent over, and reply Interpol that their search for the perpetrators have yielded nothing. In such cases, maybe you can ask the central bank here to fund investigations, but (i) I doubt if they’ll actually accede to the request and (ii) given the level of corruption there, investigators are going to have to work closely with corrupted officials and buy them off in order to nab the fraudsters. Think they’ll do that?
Those insurance agents who qualified for MDRT, COT or TOT had in some way or another scammed their customers, wittingly or unwittingly they are scammers.
Ask yourself, how did they qualify for them?.. by helping their cleints meet their fianancial needs with expensive products? Without selling expensive products how did they earn enough commission to qualfiy for them? Any decent financial planner knows that there is NO way to help the cleint meet their needs with rip off and expensive products.
ALL MDRT, COT or TOT AGENTS ARE SCAMMERS.
Any AGENT dare to challenge this statement.
Before the regulator can do anything to prevent scam , we better help ourself first by NOT CRAVING. Deposit you money in ” iSAVvy Saving Account” at 1.18% p.a. or any other internet bank . We hope MAS will allow citizen to buy government bond directly through internet like USA Treasury.
What’s the point of buying even US government bonds/ treasury bills (supposedly the most reliable) when if they realise that most of the purchase is coming from abroad? What they might do is print a bit more US dollars at the opportune time, and then you’ll realise that the loan repayment is not so great given the depreciation of the greenback. You can buy, but cross your fingers and hope for the best.
Anyway, for some background on 419 scams you should google it up and look for information at the Met’s (LMP) site, the SPF/CAD’s or the FBI’s.
Is all Landbanking is a scam .? Every case in the UK so far has proved to be.
In the UK you can say Land Banking is a scam and the papers often do because there are many thousands of cases of good people losing all their money. There are no audited cases of end plot investors being successful . One of the biggest property booms ever just ended at the end of 2007 in the UK so you would expect that there should have been some plot based land banking success in 2006 and 2007 but there was none.
Many of the Land Banking companies with similar names to those now operating in Singapore offering UK plots have been shut down in the UK by the FSA and are NOT allowed to offer those plots to people living in the UK.
As a Brit let me say this. Imagine I was offered plots on the Padang in Singapore by a UK company that was not allowed by MAS to operate in Singapore. Would you Singaporeans suggest it as a good investment ? It is open land in the middle of the city. Ideal for building on and Singapore is short of building space. Would you expect the Singapore government to protect a stupid foreigner who made that investment ?
Dont invest in what you dont understand.
This Topic is a good one for the next speakers corner outing. Maybe more people will turn up as it does not touch on politics but more on their pockets.
If the topic is used for the next outing.. I would like some discussion on the current unregulated advertising of all sorts of “gurus” - forex, stock, internet … who uses explosive gains, fake phds to entice people to sign up for courses for a few thousand dollars.
I think it’s sick people are feel good profiting using unethical methods.
I is also a Brit in Singapore and I think you is the expert on land banking so I has to listen to you. There is this man tell me it was a good investment and she show me a brochure that many pupil has make money in land banking. Now I knows better.
Actually I thought that was a good piece of information about land banking companies in the UK being ’shut down’ by the UK authorities and not allowed to offer plots to people in the UK. For what reason were they shut down?
Singapore’s model of financial regulation is based on the model used in the UK. But, the role of the regulator appears to be different.
In the UK, the regulator (Financial Services Authority) are quite active in taking action against business practices that are unfair to the public. The regulator in Singapore is not active in this area. This is why more scams are happening in Singapore.
Somebody asked why the newpaper article did not mention “land banking”. The answer is now clear. The regulator (Financial Services Authority) disallow land banking to be sold to the public in the UK.
It looks like these land banking plots are allowed to be sold in Singapore. Perhaps, this is an example of the pro-active action that should be taken by our Singapore regulator. If it is disallwed in the UK, there are reasons to study how to disallow it in Singapore.
It may be difficult for the regulator to act on private sales, but they can certainly act on advertisements in the newspapers and television.
It seems many bucket shops exist and they advertise their businesses with the Local Print Medias!
patriot
Sad to see so many people get conned =(
The structured products (e.g Mini BOnds, Pinnacle Notes) have caused a lot of loss to the investors.
There were fraud in the way the products were designed and marketed. Like a scam. I hope that the regulator (MAS) will take pro-active actions to investigate this matter.
Do not sweep it under the carpet.
[Actually I thought that was a good piece of information about land banking companies in the UK being ’shut down’ by the UK authorities and not allowed to offer plots to people in the UK. For what reason were they shut down?]
The buying and selling of land for profit in the UK is not illegal and can be very profitable if you know what you are doing. With plot based land banking most of your money is not going into land it’s going into paying for a service .
With plot based land banking you buy a small piece of low value land. You also buy a service to collectively apply for, and hopefully obtain planning permission and then sell the land onward at a profit.
In a real example UK land was purchased by the land banking company at S$1000 a plot without planning permission. That land is sold today by the land banking company at S$15000 per plot without planning permission.
What do you get for your S$14000 mark-up? The land banking company say they will apply for planning permission on your behalf and if successful negotiate a collective sale at much more that S$15000 per plot.
This by the FSA (UK Financial Services Authority) definition is a collective investment scheme because a group of investors rely on the future services of an individual company to make the investment work. If you offer collective investment schemes in the UK then you have to be licensed by the FSA because there is a huge risk for both mismanagement and fraud. Unfortunately once most or all of the plots are sold Land Bankers have been known to take the money and run, or go bankrupt with mysteriously no cash available to refund investors. Or simply there is no chance of planning permission and they fail to notify you clearly of the real risks.
Its a highly profitable business. These companies often operated for a few years before the FSA caught up with them. Presumably they could not meet the requirements to get licensed so were either shut down or chose to go into voluntary liquidation in the UK and move their operations overseas.
High level FSA requirements are here.
http://fsahandbook.info/FSA/html/handbook/PRIN/2/1
Note that FSA licensing does not guarantee an investment but it does mean it’s managed within a certain set of rules.
I have no connection with either the FSA or any Land Banking Company.
so far, the authority has not declared land banking in Singapore as scam…hope my statement is correct…
You know, in Singapore many have this kind of thinking “if it’s a scam, sure the government will take action and the fact that government does not take action means land banking most likely is not a scam”…
i agree with Tan Kin Lian, regulatory should be more pro-active in tackling the scams that are getting more and more sophisticated in Singapore…
Here is a very recent article on this from the UK. Note this only about UK land plots - i can not comment on what other countries do but it does describe the UK situation very well. It strongly advises readers not to invest in UK Land Banking plots.
http://www.moneyobserver.com/content/sod%E2%80%99s-law-comes-little-too-late
“While the swindled try to recover their losses, devious landbanking companies are moving into other areas in their search for gullible investors. A quick search of online investment forums shows that parts of Ireland are still under attack from landbanking advertising and cold-calling; while the founder of UK Land Investments is reported to be active in the Middle East.
Incredibly, some financial media outlets continue to carry advertising from landbanking companies. In late June 2008, The Motley Fool website had to apologise after it sent an email to subscribers carrying an advert from CLS stating: ‘Landbanking gives you a VERY low risk and potentially VERY high return investment opportunity!’
It remains the case that Money Observer does not know of a single landbanking scheme that has received planning permission and created wealth for its investors. In contrast, there are still thousands of investors holding tiny, worthless patches of land up and down the UK. The simple advice is: don’t become one of them.”
Report on Land Banking companies being investigated in Malaysia
http://www.bernama.com.my/bernama/v3/news.php?id=367182
KUALA LUMPUR, Oct 24 (Bernama) — The Companies Commission of Malaysia (SSM) today raided three companies suspected of offering investments in illegal land investment schemes.
The raids were conducted simultaneously at the UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (Malaysia) Sdn Bhd.
There are three key questions to ask yourself on land banking.
1: If I could sell this plot today on the open market what will I get for it ?
2: What is the latest date that they will apply for planning permission on this land.
3: If the company should fail how do I get the planning permission service and sell my tiny plot and get my money ?
If you pay $100 for something that is only worth $2 then capital appreciation doesnt get your money back until you are long dead. Even then inflation will destroy any benefit.
The facts say with UK plot land banking most of your money is going towards a future service that almost certainly will not be delivered. If it is delivered it almost certainly wont be successful. Uncertainty * Uncertainty = not going to happen.
Most of your money is NOT invested in the land. The true value of the land is much lower than anything you hand over UNLESS the land gets planning permission. Based on all evidence it is pretty certain it wont.
Some people buy magic rocks , some people believe in father christmas, some people buy breast enhancement cream, some people buy land banking plots.
Some people like to believe in magic and they like to believe the magic favours them. Some people continue to believe in things that dont work despite all evidence to the contrary and will deny all attempts to inform them.
All scammers understand this and thats why a certain portion of any population is open to being cheated.