Monday, December 06, 2010

Blatant cheating (2)

I helped the consumer to write the complaint the insurance company and MAS. She was cheated by an insurance agent who sold her an annual premium investment linked policy for $40,000 (the actual amount is higher). She did not receive the policy document or the benefit illustration showing the charges.

A few months after the policy was issued, the investment dropped by 14% (but I don't know if there is a front end charge of 5%). The surrender value, which she did not understand, was only 5% of the invested sum, presumably due to the back end surrender charge. All of these facts were not explained to the consumer. She did not know that she was sold an annual premium policy that had a high back end surrender charge. Clearly, the agent cheated her.

Well, she did sign a blank form - and she admitted that it was a mistake. She admitted that she was naive for parting with such a large sum of money to a person (from a well know insurance company) who promised a higher return than bank interest. She had also invested in unit trust before, but the bank did explain the details to her. In the case of the agent (actually called financial services consultant), she thought that it would have been like a unit trust, but she never knew that it would be an annual policy that had a big back-end surrender charge.

I tried to look for an e-mail in the MAS website for her to send her complaint. There is no such e-mail address. There is a prominent message that all disputes with financial institutions should be sent to FIDREC. MAS should realise that that there is a difference between a dispute and a blatant cheating case, and should have an avenue for consumers to address MAS directly.

I wonder why the insurance company never made any enquiry about an annual premium policy of $40,000. The consumer is clearly not in a position to afford such an annual premium. It represents a large portion of her her hard earned lifetime savings, which is now going up in smoke.

MAS has been relying on financial institutions to act in the best interest of consumers and consumers to be educated. No amount of education can help consumers who can be easily cheated by crooks. I hope that MAS will make an investigation into such types of cheating cases.

Tan Kin Lian

8 comments:

yujuan said...

Would MAS bother with such a case?
They pride themselves to be involved with macro things like monitoring inflation, ex rates,
things that would put their names on the reputation list, that would increase their bonuses.
Such a cockroach case is not worth their time, they would just conveniently quote caveat emptor or something like this.

zhummmeng said...

The insurance companies don't care how their salesmen did so long they bring in the sale.
With the top down fair dealing quidelines also no change. Now with more guidelines easier for the agents to hide and the senior management bochap.
Blatant lying , cheating happens daily and right before the agents' supervisor's eyes yet they pretend.
10 out of 10 cases never meet the reasonable basis , never mind. The supervisors only want more sale and the senior management wants more APIs. The whole insurance company collaborates, the agents, the senior management, the compliance collude to cheat the consumers.
Where can those wholelife, endowment and anticipated endomwent ever meet the clients' needs no matter how unique the clients' needs are except the very rich who are splurging their money for other reasons other than insurance needs.
MAS must come down hard on them, both the company and the agents.

Lye Khuen Way said...

Only way to get attention from the "authority" in Singapore nowaday, is to have your case published in the STor featured on the local TV channels. ( That is quite a feat, if you ask me !)
Then again, no body may deem it their responsibilities to respond. That itself tell you as much why there are so many grouses/complaints.
Long, long time ago, it use to be your friendly MP who would lend a hand.....

Tan Kin Lian said...

Hi Lye Khuen Way
Even letters printed in the Straits Times are ignored by our Government. Singapore has now reached this sad stage.

Tan Kin Lian said...

Hi Lye Khuen Way
Even letters printed in the Straits Times are ignored by our Government. Singapore has now reached this sad stage.

zhummmeng said...

MAS talks and talks only. Wonder how many directives and guidelines have been issued since 2001, including the CEDLI , the FNA every agent had to go through. 10 years on the situation has not changed. In fact it has gotten worse. More cheating, more unehtical practices passed off as market practice or industry practice. People before profit crap is a facade to con more consumers. Like Wikileads, the truth found is what they say to the public at large and what they do is different, the practice is commission before people. Putting themselves first and the customers last.Despite so much criticism about par products the insurance companies also bochap.

singapore man said...

Have enough proxies help to shield the ministries from doing their jobs, with the finial result that the poor folks without lawyers or connection get screwed. And once in a while the poor folk do prevail, and the ministries will sing a different tune & stand in the limelight saying the system is good and fair. Reader are matured enough reached their own conclusion whether it is a hypocritical or not, i would not insinuate nor comment

eliska said...

Mr Tan
What you say about being ignored is undeniable.
I wrote to NATAS about Travel agencies marking up on airport taxes and fuel surcharges I was told in no uncertain terms to bring your "case" elsewhere. There's no avenue for recourse as STB has no feedback channels from consumers. High handed officials.

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