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
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