Tan Kin Lian's Blog: Behavior of a thief

Friday, February 04, 2011

Behavior of a thief

It is quite common for a bank to impose dubious charges and fees on unsuspecting customers, such as a hefty fee for renewal of a credit card, or a fee for late payment. When the customer finds out about the charge and protests, the bank waives these charges.

The bank hopes to earn the hefty fees from customers who did not notice the charges and did not protest. This is a behavior similar to a thief. It is now quite common for respectable institutions to engage in this type of dubious behavior in the pursuit of greed and profit. Integrity, honesty and ethics have gone through the door!

I wish to send this message to our business corporations to be true to their statement on corporate social responsibility and to act honorably and make an honest profit, not by adopting behavior that is similar to theft.

I also ask our regulators and legislators to step forward and do their duty in upholding integrity and honest behavior in our society. Do not pretend that these bad behaviors can be left to be sorted out by the market. Even the USA, that has promoted the concept of the free market, has now decided that legislation is necessary to control the bad behavior.

Tan Kin Lian

13 comments:

Lye Khuen Way said...: Good Wishes for the Year of the Rabbit ! Must add that like Mr Tan , I sincerely wish those in position to make things right will do soon.; February 04, 2011 12:02 PM
zhummmeng said...: Take without permission or informing the other party is theft.
Like the insurance company deducting the mortality charge without letting you know is theft. There is no where in the BIs that says the mortality charge is deducted from your cash value on the increasing basis after your premium is depleted and not enough meet the charge.
Also the insurance company never says or is silent about the fate of mortality cost cost of insurance. It never says it is an expense and it is gone but leaves it to let the policyholders that there is a refund of the charge. This is non disclosure and also a lie. A lie because insurance agents always tell the clients that whatever you pay for WL plan is returned. This is NOT true . It is never returned. The cash value comes from the surplus premium policyholders paid. So this is a lie and the company also by being silent perpetuates the lie.
Whole life products don't return the premium you paid....they return what you paid in excess of what is actually required.; February 04, 2011 12:54 PM
AP said...: I read the annual credit card subscription fees on the application form and the late payment charges are printed on my credit card bill. These are not in fine print. I have no idea what you are talking about.; February 04, 2011 1:44 PM
Lye Khuen Way said...: Some like SO, have no idea. that almost all Credit Card issuers will waive the annual fees if asked. So much for openness.; February 04, 2011 2:17 PM
augustine.h said...: Late fees and annual fees are inclusive in the application forms, websites and reading materials attached when they mail the card to you. All these charges are communicated up front. How can it be considered theft? "Caveat emptor"; February 04, 2011 3:24 PM
zhummmeng said...: This is video by Wilfred Ling. He shares why people are under insured and robbed of the much needed insurance. See the video
http://www.youtube.com/watch?v=Se9IhM4ZpB8

This is the legal theft, ie a theft that is with full blessing of the regulator.Many of these thieves are plundering the man in the street daily of their hard earned money.; February 04, 2011 7:05 PM
Vincent Sear said...: Zhummmeng, interestingly you can link any and very issue to WL. WL expensive as it is, by it's structure, doesn't charge mortality costs to individual policies once a premium is agreed and incepted. The premium remains the same, the coverage can only go up (with RB as annually declared) but cannot come down (RB once declared shall form part of the policy not to be taken away). The most an insurance company can do is to declare less RB than projected (a.k.a. cut bonus) or even declare no bonus for a year except for the guaranteed portion.

All premiums in the same series go into the same life fund. WL policyholders are not investing in a unit trust, they're participating in a life fund. Their bonuses depend on four factors, the deduction of distribution costs, the performance of what the life fund invested in, the claim experience (claims are paid out from the life fund) and the percentage of surpluses allocated to participating policies that cannot be 100% as shareholders need to take a cut in share dividends too.

That's why in traditional WL, you can decrease coverage and premium accordingly but you can't increase coverage by paying more of the same premium rate because you can only grow older, not younger.

It's different at RP-ILP where the policyholder don't participate in the life fund, simply allocating premiums between coverage and investment fund. As the coverage is YRT based, you can always increase or decrease coverage and premium at any age as the mortality charges keep increasing with your age anyway.; February 04, 2011 7:53 PM
ron said...: Contractualy, the card issuer is not wrong and the card holder is deemed to have accepted the terms when the card was used.

There is no alternative when it comes to contracts concerning credit, debit or charge cards. The issuer bears the burden of risk.

Just remember to monitor your cards.
and here are some simple tips:

A) keep 2 cards only ( 1 for overseas and the other for domestic)

B) Never opt for GIRO with cards.
( far better to pay late fees than have auto deduction for something you did not agree to buy )

C) Check monthly

I know many people are attracted to points, mileage etc. If your card is issued to you by your employer then, its fine. ( you still bear the risk though )
But if you have the card under your own name, be vigilant and do not get side tracked by the offer of points... its a trap..; February 04, 2011 7:54 PM
Lye Khuen Way said...: Caveat emptor ! Precisely the answer you would expect. What honour is left in our society, if every endeavour has that idemminity clause for the seller.
Now I can understand why the Authority have been dragging their feet as far as Cunsumers' protection is concerned. Comsumers themselves are half-hearted, happy to be given waiver, unsure of their rights to fair dealings.; February 04, 2011 8:28 PM
DareToAct said...: If you do not lock your door, and someone might come in to steal things from your house. Now, is this consider theft? Remember, the police warned us before to lock our doors properly.; February 04, 2011 8:41 PM
Tan Kin Lian said...: Reply to DareToAct
If someone comes into your home and take away your property, it is theft - regardless of whether the house is locked or not. If the thief breaks into your house, it is housebreaking, which is a more serious crime.

If someone sells something and mispresents the product, it is cheating.; February 04, 2011 10:17 PM
zhummmeng said...: Vincent sear,
I don't know where you got this information.. of WL...I agree that premium remains the same through out the life of the policy .. this is NOT the cost of insurance.. The premium is made of 2 components...the mortality and the surplus..The mortality increases with age and IT IS AN EXPENSE AND NOT RETURNED. Therefore in the early years more of your premium is invested to create the cash value. This component shrinks proportionately to the increase of the mortality cost and it will come a time when they cancel each other out..After this age, ie about 60 years old, the mortality cost surpasses the premium and this is where the insurer dips its hand into it to steal it to pay the mortality cost WITHOUT telling you, right? This is stealing!!!
Please verify with an actuary...no point you and I argue till the cow comes home we won't agree still.
****in WL mortality cost is also YRT.; February 05, 2011 12:22 AM
Vincent Sear said...: Yes Zhummeng, no point debating. Go and find one WL policy that has past bonuses deducted for mortality charges and show us.

I'm not pro-WL. I'm also interested where you learn it from.; February 05, 2011 2:31 AM