I have written to H and MAS 3 weeks ago. Until now, I have not got any reply from them yet. I have bought Pinnacle series 6 & 7 from H. I felt that I am misled and I this was what happen to me.
Last year June 2007, I was looking around for banks that offered good fixed deposit rates. Through the website, I found out that H offered one of the highest interest fixed deposit rates.
My wife and I then went to H as it was near to our workplace. When we approached the counter staff on the intention of opening an fixed deposit account, she instead persuaded and recommended us the Pinnacle Notes Series 6 & 7. She told us that this product was as safe as fixed deposit but with a much higher interest paid out. Upon hearing this, we were quite excited and keen of learning more of this product. She then introduced us to the FM J, as she was busy assisting customers who had signed up for the Notes.
J started by showing us the brochures at the side of the counter. She told us that the response was overwhelming the H might stop accepting further applications as they had a lot of back log to process and clear.
The following was what she had told us during that short time :-
* The notes issued are invested in five leading banks, namely DBS, Citibank, UOB, OCBC, BOA and as well as SingTel.
* It pays between 5.2% and 5.0% interest per year for a 5.5 year tenure.
* Series 7 is tied to the share price of the mentioned 5 leading banks and SingTel.
* The risk is low and it operates just like the fixed deposit account.
* She did mention that the principal amount is not guaranteed but she assured us that the 5 leading banks and SingTel will not go bankrupt. She told us that even if you put your money in the fixed deposit account and the bank goes bankrupt, you will also stand to loose your principal amount.
* She further explained that as the money will be invested in the mentioned 5 leading banks and SingTel, even if you are so unlucky that one of the banks goes bankrupt, you will note loose all your principal amount, unless all the 5 banks go bankrupt a the same time.
* During the short time that she explained the product to us, she kept emphasizing the word "secured" credit linked notes. Hence, the product is extremely safe as it is linked to the 5 banks and SingTel.
* We were under a bit of pressure to sign up on the spot as she kept saying that due to the overwhelming response, H would stop accepting further applications these one or two days, before the closing date.
We were definitely being misled into believing that the Notes are used to invest in the 5 banks as well as SingTel. We invested $X Each in both Series 6 & 7 Pinnacle Notes.
Hastily, she filled up the application form for us, with brief explanation. Thereafter, she told us that she needed to do a simple survey of my profile. She said that this was required by her company. She flip through the survey form and randomly asked a few questions. She asked about our particulars, whether do we need the money in the next five years, and also did we purchase any similar products from other banks. The rest of the questions, she said she will tick "average/medium".
Before we left the bank, she handed a copy of the application form and survey form to us. Since then, we did not hear anything from H until 11 July 07. We received from DMG & Partners a confirmation notice that we had bought the Series 6 & 7 Pinnacle Notes. We have also received 2 payouts, on Jan 08 and July 08.
When we learnt of the collapse of the Lehman Brothers Bank and protest from investers of Pinnacle Notes, we decided to check it out from H.
On 9 Oct 08, I went to H to check if the Notes that we have invested are alright. Only then that I came to realise that our money are actually not invested in the 5 mentioned banks and SingTel. It was instead invested in 125 companies and 2 (Lehman Brothers and Washington Mutual) had already bankrupt. I was shocked and asked to see the list of the 125 companies. They were initially not very willing to show me but I insisted. I was even more shock when I received their email, as it is not only invested in the 125 companies but also used to buy credit card bills of Chase Bank.
I asked why we are not shown this list, prior to our purchase of these Notes. His explanation was that the list of companies which they have invested were only released after the offer period closed.
We were angry and fustrated that how can a Relationship Manager from such a reputable financial institution, deceived us into believing that the product is issued and invested in the 5 banks and SingTel, and that it is very safe, just like fixed deposit account.
Did the Financial Insitution do a risk assessment before they undertake to sell the product? Why are we not shown the list on what were invested. No clear and detailed explanation is provided before our purchase. Why H did not update us after the closing date on the list of companies that the notes invested. Why H did not update us when 2 of the 125 companies go bankrupt?
KTS
I was also very attracted by the interest rate offered. But what saved the day for me was that the tenure was 5.5 years, which I hated. I terribly do not like my money to be tied up for so long. Hence I never invest. I am lucky that I have this hatred. Which is why I also never buy wholelife or endowment policies.
ReplyDeleteIf the tenure was for 2 years and at even 3%, I would probably also be one of the victims.
Talk about the blind leading the blind. "J" could have been as blur as us as far as the "investments" were concerned.
ReplyDeleteJust wondering. The reputation of Local blue chip companies were used to entice the unsuspecting investors to part with their money. It seems that they have not protested or taken action against such obnoxious use of their good names. Isn't silence very damning? If the funds were reportedly not invested in these blue chip companies in this episode then why were their names used to hock the toxic stuff?
And our funds were used to take over the credit card debts of a US bank and we are told that Singapore should not over regulate its financial industry???? The first tsunami was started by the sub prime mortgage. The next tsunami and trust me, it's gonna be a big one will be the credit card default crisis.
It's ok with me though if such junk are not allowed to be sold to Singaporeans.
When the cat steals food from a monkey, the cat may end up dead.
ReplyDeleteWhen a tiger steals food from a monkey, the monkey thanks God that it was not eaten instead.
I am glad I have listened to my father who used to work in the finance industry. He told me that only the buyer can buy wrongly, the seller will never sell wrongly.
ReplyDeleteWith that advice, I never fell prey to salesmen who use all sorts of tactics including but not limited to the following:
1. Today last day offer, tomorrow no more.
Ans: Congratulations that you have met your quota and not offering anymore tomorrow. More good years.
2. Selling fast, few more units. Grab before it goes.
Ans: Congratulations that your business is doing so well. Golden Period.
3. You need to put a deposit first to secure your booking otherwise the next customer will get your share.
Ans: Congratulations again. If you can get someone to buy it, please go ahead. Otherwise you can sell it to me. I can wait.
The best service you can get is that initial time you meet up with them. If you are uncomfortable with that meeting, you can be sure subsequent meetings after you have bought will be worse since you have already paid and their focus is on new customers. All these are learnt from many years of experience with many big name organisations as well as roadside stalls. A business is a business is a business. Buyers Beware.
You guys have been in the market for so long, hvent you heard about the Classic Switch and Bait sales tactics?
ReplyDeleteby gods when I read your story!
"..I found out that H offered one of the highest interest fixed deposit rates."
..When we approached the counter staff on the intention of opening an fixed deposit account, she instead persuaded and recommended us the Pinnacle Notes Series 6 & 7. .."
"..She told us that this product was as safe as fixed deposit but with a much higher interest paid out. Upon hearing this, we were quite excited and keen of learning more of this product."
"...She then introduced us to the FM J, as she was busy assisting customers who had signed up for the Notes."
"...She told us that the response was overwhelming the H might stop accepting further applications as they had a lot of back log to process and clear."
The high FD interest was just to lure you in for the Kill
The rest are just showmanship. Ingrained Showmanship.
Adapting the fundamental ideology behind the Nigerian Scam that been going around for so long, by stepping in [and signaling your 'keen-ess' thru out], you have passed their first qualifying test for prospective 'customers'
That You are [somewhat] greedy!
kts, welcome to the world of investing in singapore. i hope you have not lost your entire life savings like many.
ReplyDeleteI believe this was what happen to many many more investors. As i have commented in this blog when ever investors approaching for a bank to place their money if the conventional FD they are instead recommended by this kind of structured products which are never heard before our grand mother grand father times.
ReplyDeleteMy question was why the RM was soon keen to recommend these structured products instead just let the customers place their money in FD? In many cases as it was happen to me before, we was never ask the RM for an alternative but just try to get the best FD rate at the most appropriate time frame, and we always end up leading by them to these structured products.
This approach was morally wrong in the first place?
The regulator must act now to probe why so many investors have been lead to the investments into these highly "toxic" financial products. One should not hind behind the notion that "Invest at you own Risk" " Invest with your eye open".
The FI and RM and so the regulators must act honestly to protect the investors.
Time to probe why and how these kind of products can come into existence and most of the victims are individual investors who has put their hard earn or extra money into them.
G C Tham
Same story here.
ReplyDeleteMy mom was at H making a FD for ~$100K. FM assessed her uneducated retiree investment profile as "conservative". FM then recommended PN10, said its the safest form of bond, based solely on 6 big names like Singtel, SIA, Keppel etc; and that worst case scenario was a 5% drop in value only. For not being able to understand English (give her the prospectus also no use!), she trusted this bank H's FM for his recommendation, and took up the offer.
And now this ... *sigh* *shake-head*
If the FM's intention was not to cheat, then I really don't know what it is!
Anonymous 11.33am //The reputation of Local blue chip companies were used to entice the unsuspecting investors to part with their money. It seems that they have not protested or taken action against such obnoxious use of their good names.//
ReplyDeletePinnacle Notes 9&10 is worse. The creator of the Notes gets bolder and used bigger names. Commonwealth of Australia
Hong Kong SAR of the People's Republic of China, Republic of Singapore. The governments!!
I treat tellers as tellers. They are there to perform simple tasks as deposit and withdrawal of money and give you the transaction slip. thats all. It does not take high eduction qualification to be a teller. To me they are not qualified to give an opinion about any investment product.
ReplyDeleteFrom what I can gather, KTS had put a substantial sum into the notes for him to feel so sore about this episode.
Despite being given the brochure to read, he relied on the verbal presentation by the RM.
I had a look at the product brochure which had a lot of verbage and small prints that The terms used are highly technical.
From KTS's well presented letter, I can conclude that he is educated. I want to ask KTS if he had tried to understand the product that he bought. Why did he and his wife relied on the verbal presentation of this RM, whom they they had just met and only for a short time, especially for a sum that when lost, would make him feel very angry and sore. Nowadays a lot of things from special offers, fast food vouchers, guarantee cards, mobile phone contracts ....) all come with small prints and terms and conditions. Surely one has to understand them before going in.
While we can see from the letter that the RM's presentation that the full degree of risk was not presented, an investor cannot simply rely on the verbal presentation. This RM whom had just given a very short presentation, is, to put it very bluntly, merely selling the product.
While one will be feeling very sore about losing the capital, one should objectively look inwards to see if one is partly responsible for this unfortunate incident. From the letter, it would appear that eveyone else is at fault except for the investor.
The problem wth legal pursuit here is while its difficult to establish if the FIs would be at fault for offering such products, its VERY VERY CLEAR the investor IS for voluntarily taking it up.
ReplyDeleteDear Sorry Investors,
ReplyDeletePlease tell me HOW a 50 yr-old businessman or woman (or teacher, IT manager, or ENgineer, or Ph.D scholar etc) can be so easily "MISLED" by a 25-yr-old relationship Manager into buying banking products???
5.32pm,
ReplyDeletea conman does not have to be old.
Even more puzzling is the MAS keep asking burnt investors to refer back to the FI that cheated them in the first place. Puzzling, I hope in future no rape victims will be referred back to the rapists or mugged victims refer back to the robber or beaten victim refer back to the bully.
ReplyDeleteGo to POLICE STATION.
ReplyDeleteCOPY THIS AND PRINT.
AND PAY the FEE.
ASK POLICE TO INVESTIGATE>
whenyou have thousand of police reports around, and as TAX payers, someone got to go down and do the job for you. MR.TaxPayer.
All these investors actually has an admirable trait... very trusting of our Financial Institutions.
ReplyDeleteHowever, this sorry episode has shown up the banks as worse than used car salesmen in their approach towards making the sales.
These banks took advantage of the trust Singaporeans have in them and turn it into a money making venture.
Can the banks regain the trust of the people..... I guess we will all have to keep our eyes open.
Best Regards
Who Am I?
Polis should trace , interview the RM and give a kick to the management.
ReplyDeleteIf POLIS DO NOT act on CHEATING case. SACK the POLIS.
A used car salesman's ruse can be discovered in hours. Likely he or she wont' cheat. But an insurance agent or a RM's can be found only years down the road.
ReplyDeleteHave you heard of insurance agents' talk of making a lot of money for a year or two and then leave the industry? Why?
The problem is consumers are too trusting and unsuspecting of the agents who might be their siblings , relatives or referred friends.They become easy victims of their scams. Some consumers buy because of the brand names, like NTUC, beleivng that it is still the same old ntuc under Mr.TanKL.The unsuspecting customers are preyed and dumped with useless and toxic products.
These customers walk into the kelong.
Last year, I too was scouting around for better interest rates and saw ads on minibond, pinnacles, jubilee... etc. I went into 2-3 branches of local banks to try to get prospectus to find out more, but was totally ignored every time.
ReplyDeleteI guess it was because of my shabby dressing (shorts & singlet), and I'm on crutches. Oh well... lucky me...
To 1.12pm
ReplyDeleteI just found out that the minibonds sold in HK had HK blue chips as reference entities. Surely this is further damning evidence that this was a planned con job by the manufacturers of this product...
Imagine when all banks credit cards holders all need not paid...cos their bankers sold their credit and now CRUNCHED..!
ReplyDeleteSo may be everyone kena conned with toxic CDOs should Zap Zap to the maximum and let the banks collapsed on CREDIT CRUNCH,,,,
Very often when we purchasing any product we will need the advice of the expert in the line to help us decide. Take for instance in purchasing a travel insurance for my holiday I need to call up a particular insurance agency to check if skiing is covered as this travel insurance exclusion stating any hazardous sport is not covered.What is meant by hazardous sport?You will be surprised some insurance company considered ice skating ,skiing as hazardous sports while to some insurance companies these sports are not considered as hazardous.Hence similarly when it comes to purchasing these structure products the advice of the RM will definitely of the most importance.The RM has the utmost responsibility to ensure proper advice is given.
ReplyDeleteCome on! These are "Well-Trained, Highly Educated, Trust-Worthy..Integrity.." Relationship Managers/Private Bankers from REPUTABLE BANKS/FINANCIAL INSTITUTIONS....They are Financial and Banking Professionals....NOT Ah Beng or Ah Lian salesman on the street....If one cannot trust their Family Doctors, Lawyers, Teachers, Nurses...their elected leaders...the watchdogs like AVA, MOH, MAS...etc...this will a very difficult & sad world and singapore to imagine....
ReplyDeleteThey is no arguments/wrongs at all on the Trust our investors have on the RMs & FIs...it is the RMs & FIs that have let the TRUSTING investors/customers DOWN...
It takes many years & efforts to build up TRUST...but takes seconds to destroy it with stupid things done....just like our Union chief comments on some National Bank's R exercise...
Did you submit the letter personally and get them to endorse a duplicate copy which you will keep?I did that and the FI contacted me within 5 working days and an interview was conducted within 10 days from my submission of letter. I am still waiting for the outcome of investigation.The interview was conducted 2 weeks ago. Hope this info will be help to you.
ReplyDeleteI like the "rape victim being referred back to the rapist" for justice quote ... hahaha ;P
ReplyDeleteThis is how we cheated investors felt like now!
Wearing short skirt doesn't mean we deserved to be raped. Having cash to invest doesn't give the right for others to cheat us!
"Police", where are you when we needed you most?
"I am still waiting for the outcome of investigation."
ReplyDeleteQuoting this down. That was 16 Nov 2008.
your 4*,5*,6* already justify you to a POLIS CASE. cheating, colluting with third party to cheat customers. Provide false information, and wrongly placing your trust and promises in another investment, not notifying you.
ReplyDeletemost RM was given a special Perfume (you know the kind the attract opposite sex) with additive hormone... so you can fall into the sexy girl and the lengchai...I had observed many banks as they try selling us. Funny, they keep moving the RMs around the branches, so the DO not feel responsible and liable to anyone. Position promotion and Extra Perks plus hefty commissions for weekly target.
ReplyDeleteWHO is the MASTER MIND of all?
IGP- CID- can you find out? like what FBI is doing now.
There is criminal intent as more and more stories emerging....
i had felt it and I had told my dad to exit 10x100K as early as crisis cropped up. 1000 monthly is so tempting for many old investors. Poor thing, the new series even smarter, lock you for 5 years. WTF.
ReplyDeleteHow many people want to go to police station report the cheating? Can we go all together?
ReplyDeleteDear Sorry Investors,
ReplyDeletePlease tell me HOW a 50 yr-old businessman or woman (or teacher, IT manager, or ENgineer, or Ph.D scholar etc) can be so easily "MISLED" by a 25-yr-old relationship Manager into buying banking products???
**************************
I tell you why.
I do not trust the bank sales people and the prospect at all because I already had a few bad experiences with bank and know they can design many kinds of trapps for you to fall in.
So I told the sales guy straight forward I want bond only, not anything else. He confirm many times with me that Pinnacle Note are small scale bonds link to 4 countries & 3 goverment institue. I believe it same as I believe LTA note is a bond when I purchasing.
Cheating!
Quote from Anonymous:
ReplyDelete"Please tell me HOW a 50 yr-old businessman or woman (or teacher, IT manager, or ENgineer, or Ph.D scholar etc) can be so easily "MISLED" by a 25-yr-old relationship Manager into buying banking products???"
Hah!
Even Town Councils made the wrong move, what more of the ordinary citizens, educated or not?
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_303360.html
Woohoo!
"Eyes-open" eh???
First of all its not ethical to "divert" the customer to buy a product which he/she is not intended when they came to the bank. They came to the bank with the intention to put their money in a fixed deposit. Not only the bank staff "poached" their customer to buy the product that they want sell (and make commission), they "pushed" them to sign immediately.
ReplyDeleteIt happens all the time in bank.
I think the regulation should be financial advice should be given if only if the customer ask for it and a declaration should be signed by customer that they intentionally asked for advice and the risks is fully understood by the them. If not, the officer should be accountable.