I am shocked at how the consumers are being badly treated and advised. In many cases, they were given promises that turned out to be unjustified.
Although some of the poor outcome could be due to the economic climate, a significant part is due to unfair dealings, e.g. large charges taken away from the consumer, inadequate distribution of bonus, misleading advice, predatory product design, and other bad practices.
How long can the regulators keep their head in the sand?
Tan Kin Lian
As a first step, I advise consumers to join FISCA (www.fisca.sg) The fee is only $36. Join now and build a strong FISCA to educate and help consumers. Do not wait until you are "cheated", as it will too late.
13 comments:
"For things to change, I must change first". MAS being reactive while the rich minister being GDP driven, it will be hard to get their heads out of the sand. If millionairs ministers do not give approval, how to get those heads out of the sand?
My suggestion is to compile those complaints into a book or put it on this website or add it into your current book. I am sure there will be a large followings. This will helps to educate the heartlanders properly since MAS and the Govt is doing such a lousy job in this department.
Hello, REX just read a story book, some of you may have heard this before, check it out.........
Once upon a time there was a wealthy ruler who was also a miser and did not treat his subjects well. One day, a wise man came to him and said to the ruler "Sir, look out your window". "What do you see?"
The ruler said "I see a street full of my loyal subjects"
The wise man said, "Now please look at this mirror". "What do you see?" The ruler said "I see my handsome face".
The wise man asked "Your window and the mirror are both glass, what makes them different?"
The ruler said "The window glass is clear, so i can see outside. The mirror glas has a silver coating behind it, so I cannot see through and the light reflects back and I see myself".
The wise man replied "Very good. And I say to you humbly, Sir, your love for silver has change your soul. Once, your soul was as clear as the glass of this window. You could look out at the world and see everyone. But, you have now coated your soul with silver. You no longer see anyone else but yourself."
The ruler understood at last why he had never been happy for a long time despite having unlimited wealth. He was overcome with great shame, and he resolved to change his ways.
REX
If MAS refuses to play the role of regulator FISCA can fill the role.
There have been too many malpractices both committed by the companies and the agents.
The insurance agents are no difference from the past before the advent of the FAA. They are still predatory and use unethical means to con their clients.
The root cause of these evil practices is the COMMISSION and NO REGULATION.
FISCA will provide the review for clients of their existing policies and expose the mis-selling and misrepresentation. I bet you at least 9 out of 10 policies have been mis-sold.
Even harmless looking single premium endowment has been mis-sold as FDs with guaranteed return or the annuity purchased with CPF Minimum Sum(MS) has not been properly sold and sold without fact finding and non disclosure padded with lies.
FISCA must expose all these harmful practices for MAS to see and this is the result of non regulation. Also to let them know that the FIs and the insurance companies cannot be trusted with the check and audits.
The current situation is like the companies and the insurance agents colluding to cheat the consumers, one the manufacturer and the other the peddlers.
Yes, such malpractices must be exposed!! FISCA must do its part for consumers by pinpointing which Regulations have been wantonly contravened. MAS must be made to do its enforement work if there is evidence of breach of the Laws!!!!
The handling of MB victimized investors by the authorities is going to be the same as that of gambler addict. When things turn ugly e.g. a sudden surge of young addicts, no one is going to take responsibilities. Who allowed MB to be sold to retail investors? Who allowed Casinos to be build in Sgp? First they said it is for the sake of economy, then they said the revenue of casino is 30% thus most of it are from theme park. The authorities way of achieving GDP is the same as insurance agents. Market and sell aggressively and when problems arises, sweep under the carpet or give a comment like "we cannot micro manage" or "if you don't understand, don't sign" or "who ask you to go casino?" and then close case.
Who are the people who are going to pick up the pieces? The heartlanders, of course. The final solution? Come up with a catchy name scheme and give the household $200 a person for relief or rebate while they themselves take a pay rise of thousands as they are drawing millions a year.
In any scheme the poor suffer the most. They are always the victims. They are victims of insurance agents who purportedly should be the people to help them but instead the agents fleeced them,.They become easy preys of the predatory insurance agents.The agents can't touch the rich because the rich don't need insurance and not as gullible and trusting as the poor man in the street.
I have read many balanced reports in the Singapore press and on TV on subjects like Land Banking that talk about the long term potential while failing to mention the huge and highly likely risk of losing most or all of the investment.
I attended a speech by a business leader where the presenter said in Singapore if it is not specifically allowed it is banned, wheras in the USA if it is not specifically banned it is allowed.
Many residents of Singapore act like that. They assume if it is allowed to be advertised it must be OK. I have seen bloggers saying here and elsewhere that Singapore does not allow scams or fraudulent investments to go on so Land Banking must be OK. I even saw a Land Banking company make a similar statement.
A first step would be to relax the defamation laws to allow public and open discussion of named investments that are obviously risky or even straight out scams.
A second step would be to make advertisers financially responsible for the claims they make in large print.
Singapore does make it very easy to do business. That should not be a reason to allow obvious cheating and fraud.
Response to comment at 8:59 AM
It is not a problem of NO Regulation but NO ENFORCEMENT of regulations. When problems were raised, MAS will promptly replied that there are already regulations in force. They expect that regulations will automatically resolve the problems. Since they have this type of mentality, how could their head be out of the sand?
There are many examples that can be quoted to this effect. The obvious one is the non-compliance with MAS regulations for the sale of structured products. If it was not the collapse of Lehman Brothers, I am sure MAS is still not aware of the mis-conduct by the financial institutions. After the Lehman Brothers has collapsed, none of the financial institution was prosecuted for the breach of law under Section 27 of the FAA, irrespective of numerous complaints lodged against the financial institutions. Worst still, when MAS turned down the petition signed by 777 individual customers, it stated that the financial institutions have generally reviewed every case of complaint on its merits. This is absolutely an untrue statement !
The Senior Minister, Chairman of MAS, may need to spend some more time to examine the enforcement of the MAS's regulations. The possibility of his being misled by their internal staff paper cannot be ruled out!
Dear Mr Tan,
I have a recent encounter with P Insurance company.
I had been explained by the Acturial on the calculations in my first meeting. There are no mentioning of the 10.3% projected maturity value that it is a Top-Bottom approach. Then drive down into the Projected Performance Bonus of 330% drop to 231% and Projected Maturity Bonus of 10% drop to 7%. I was given a Bottom-Up approach in the meeting. Hence, i further request to meet the Head of Actuarial for an meeting. The fact is actually Top-Down approach, but it is not stated in the letter from P insurance company. In the letter, it mentioned that the 10.3% drop in projected maturity value is the result of the revisions in PB and MB. With the revisions to projected PB and MB, the policy's yield to maturity has been revised to 3.8% p.a from 4.5% p.a. This misleading to me as calculations should be clearly stated. I would consider mis-advice by the company.
When i meet the head of Actuarial, i had been informed, no formula for the 10.3% downwards in reduction in Projected Maturity value. As an consumer, we have a right to know how the figure of 10.3% is derived as we are paying for it. Based on the feedback from the head of Actuarial,there is No formula for deriving the 10.3%. When i ask her where she plucked the figure of 10.3%. Is it from the sky or sea? Is this a professional answer from an Acturial from P company?
In the end, the answer is a yes, only that it will be very technical. This had been mentioned that this involves other policies holders confidentiality. We are not asking other policies holders details. The "flickle" answer i got for the 10.3% calculations formula is puzzling.
I had mentioned that the ethics and attitudes of the P company staff that had serviced me are questionables. This was felt by me after dealing with them when the answers that are not consistent. There are traces of hiding the truth.
When i speak to the ceo in a call, i mentioned the concerns on the staff work attitute in addressing the issues. I was given a reply from the ceo that all my concerns are accusations against the P company staff. I am just wondering they view customers feedbacks are accusations. Is this the right way of addressing from ceo that all the feedbacks are baseless. I am disturbed and worried with the present situations where concerns are not addressed but end up as accusations.
So far the ceo are avoiding to write back to me to do the explainations.
Regards
Sad & Worried.
Let MAS know. Copy this to MAS? I know it won't act but will taichi to somebody else. The point here is let MAS know there is problem with the system. Because of the system there is wrong with everything from the products to the salespeople.
MAS talks of whistle blowing. Here is one case.
"The Senior Minister, Chairman of MAS, may need to spend some more time to examine the enforcement of the MAS's regulations."
This is a joke. You cannot possibily ask him to check his own action? All the actions taken so far were done without is knowledge?
Like I said, with his life story written recently, my guess is he is stepping down in the next election. Maybe this is the government way of cooling down the MB investors to gain some votes but I think they are still living in the 20th century for using such lame strategy....
The product specifications and projections of all series of insurance policies issued by Singapore insurers must be filed with MAS. However, it's not an approval-seeking process. MAS don't need approve anything about individual policies issued by licensed insurers - they're already licensed. This is the same case with bank structured products.
What MAS do is regulate the licensing requirements of financial institutions as going concerns. Which charge more expensive commission or which charge less, it's supposedly a free market, as long as there's no misrepresentation of expensive commission as cheap. Some companies and agents have been very successful with full disclosure of expensive charges and yet convince their clients to pay it by value-added service differentiation. That's fine by MAS.
However, there're some less competent agents who try to compensate their inadequacy in sales and service skill by trying to pull fast wool over less informed clients' eyes, who wouldn't have bought had they known full facts.
Dear Mr Tan
Your points here (as well as in other parts of your blog) have very old historical roots.
In essence the question is "Who guards the guardians?"
Here's the hyperlink reference from Wikipedia:
http://en.wikipedia.org/wiki/Quis_custodiet_ipsos_custodes%3F
An excerpt is as follows:
History
-------
The essential problem was posed by Plato in The Republic, his work on government and morality.
The perfect society as described by Socrates, the main character of the work (see Socratic dialogue), relies on laborers, slaves and tradesmen.
The guardian class is to protect the city. The question is put to Socrates, "Who will guard the guardians?" or, "Who will protect us against the protectors?"
Plato's answer to this is that they will guard themselves against themselves.
We must tell the guardians a "noble lie".[1] The noble lie will assure them that they are better than those they serve and it is therefore their responsibility to guard and protect those lesser than themselves.
We will instill in them a distaste for power or privilege; they will rule because they believe it right, not because they desire it.
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