Saturday, September 24, 2011

Unscramble the words

Here are some familiar words that have been scrambled. Can you rearrange the letters to get the correct words?


Additional scramble words and the answers can be found here

Word Power - test your vocabulary

This book contains scrambled words. You can test your vocabulary by rearranging the letters to form the correct words. Suitable for children and adults.

The answers are found here.

Consumer Protection and Fair Practices Act

This Act is administered by the Consumer Association of Singapore. Some bad business practices may be disallowed under the Act, e.g. forfeiture of life membership of gym. Read the legislation here:

Read the details of the unfair practices here.

Here is a specific practice that may be relevant to the gym membership:
11  Taking advantage of a consumer by including in a consumer agreement terms or conditions that are harsh, oppressive or excessively one-sided so as to be unconscionable       Bullying a consumer by using oppressive terms in the sales contract       Example:       Consumer signed agreement for some renovation works. Consumer changed his mind the next day and was willing to compensate contractor on any cost incurred. Renovation company insisted that consumer must pay a termination charge equivalent to 80% of the total renovation sum as stipulated in the agreement

Friday, September 23, 2011

Distribution cost

A consumer came to see me about her investment. She wanted to invest her salary for retirement. A financial adviser sold her an investment plan. Later, she learned that it was a life insurance policy. She did not realise that the benefit illustration contained a number called "distribution cost". This was defined to be the expenses of the insurance company.

As the monthly savings is large, the distribution cost amounted to $40,000. The financial adviser did not explain that this amount is taken from her savings to pay commission and expenses of the company. The consumer realised it after contributing for 18 months (as the charge is only shown after 18 months). By that time, it was too late for her to stop the policy. Even if she terminated the policy, there is a surrender charge that takes away the balance of the distribution cost. It was a big shock to her - to lose so much of her savings - representing her hard earned saving for 18 months!

Many people bought a life insurance policy without knowing what the distribution cost really is. To learn about it, they should attend the FISCA talk on life insurance. Be aware, so that you do not lose so much money.

Dealing with the global crisis

I expect the global economies to go through a difficult time over the next two years. Many analysts and economists are worried about the debt crisis in USA and Europe and the slowdown of the economies in the advanced countries.

We should be prepared for a difficult time for the Singapore economy. We can expect more people to become unemployed.

If I were the Finance Minister, I would implement the following measures:

  • Allow unemployed people to make monthly withdrawals from the CPF account. The amount should be sufficient to meet their monthly expenses. This can be for a period of 12 months and may be extended.
  • If there is insufficient balance in the CPF ordinary account, allow negative balance to be accumulated (with interest at 2.5% per annum). The negative balance will be recouped from future contributions, when they find a job. If it remains negative at the time of retirement, it can be a charge on the property that has been purchased with CPF funds
  • The monthly repayment of the mortgage loan can be deferred during the period of unemployment.
If the unemployed people are not required to sell their property during this distressed time, the property market need not collapse - which was what has led to the problem in the USA and Europe. 

Tan Kin Lian

Live streaming of talk on life insurance

This talk will be streamed live at 9 pm tonight (Friday 23 September). 

Teaching character and values in schools

 I welcome the decision by the Minister of Education to teach values and character in the school syllabus. This is an important lesson to be taught to your young people. It gives them the confidence and guidance on their future decisions.

I advocate teaching of the values of honesty, fairness, positive attitude, courage and public service. These are the values that have guided the important decisions in my life. With these values, I am confident of spending my mind on many issues. They guide me on differentiating what is right from wrong, good from bad. These values form my personal character.

Different people may wish to give different emphasis to other values, such as respect, compassion, care for others and innovation. It is all right for them to choose these other values. I believe that these values are already embedded in  my five core values.

I chose my five core values because I found them to be rather lacking in our society and will make an important contribution to improving life in Singapore.

Tan Kin Lian

Forfeiture of Lifetime membership of Gym

Hi Mr. Tan,
Did you notice the series of letters to ST Forum on the lifetime membership of a fitness club. Some people paid thousands to get the lifetime membership, to have it revoked later (presumably without refunds) because they forgot to pay the annual admin fees of a few dollars. The fitness club makes it not so easy to pay the fees (eg. no giro payment).

I wonder if this can be classified as a scam. But it definitely highlight another issue of prepaying for a product/service.

I think that this is an unfair contract term. There is a law against such unfair contracts. I believe that this law is being handled, in some ways, by the Consumer Association of Singapore (CASE).

Thursday, September 22, 2011

Active discussion in Facebook

If you wish to discuss some of the issues posted here in my Facebook page, you can create a profile by following the instructions here,

Successful claim for refund

Here is a case 2 years ago, where the people who attended a trading course and paid large fees were able to get a refund, due to misrepresentation.

Be educated and savvy on financial matters

Why do people refuse to pay $20 to attend a 6 hour financial planning workshop organised by FISCA and yet pay $5,000 to attend a 3 day training course on forex trading or get a free talk by a financial adviser who sells them a financial product that takes away more than $5,000 in commission?

When the investor gets conned of their savings and they come to FISCA for assistance, it is too late. There is little that FISCA can do at that time.

Be wary of high pressure selling

It usually starts with an invitation to a free seminar held in a posh hotel. The invitees are treated with an impressive presentation and free food. After that, the hard pressure selling comes in - and those who are not strong willed ends up signing for an expensive purchase - for a $5,000 training course on forex or property investment, or a $20,000 time sharing unit, or a $50,000 land banking plot, a $20,000 wine investment or whatever is being sold.

All that is needed is for the promoter to get 5 people to sign up and they will earn enough income to pay for the expenses of the event, the advertisement and the commission payable to the many well dressed marketeers who are trained to identify and work on the gullible investors.

Like some other people, I have been the victim of this type of marketing a few times during my life. Fortunately for me, the amounts of the purchase are quite small. My biggest purchase was a massage chair costing $6,000. Quite likely, the real cost would have been only one third of the price that I paid. In this case, it was not an impressive talk at a hotel, but a glib talking sales person at a sales booth.


Wednesday, September 21, 2011

Request for assistance - insurance claims

This FAQ shows the information that is needed by Tan Kin Lian in providing assistance on insurance claims.

Charges for property courses

Dear Mr Tan,

Just read your blog on some of the forex exchange training courses.

Will you be able to touch on the property investment as well? Almost everyday I see advertisements in the Straits Times promoting about property investment courses (where they claim that you can invest with little or no money and own 3 properties with 1 property). These courses are also not cheap at all. People who are unable to buy properties of their own can get together in a group and pool their resources and invest together. 

I have never attended any of these courses before. I'm not sure if this is the legal thing to do in S'pore. Please advise if you can also look into this area besides financial investment.


 I did not realize that people pay money to attend property courses as well. It seems to be another way to give away money!

Request for assistance on a bad investment

Here is a guide on the type of information that needs to be provided by the consumer who wishes to seek the assistance of Tan Kin Lian to seek compensation due to the failure of an agent or adviser to give the relevant information on a financial product.

$5,000 for a forex training course

An investor shared this experience of attending a foreign exchange training course. He paid $5,000 for a 3 day training course. The course could have been completed in half the time, but was stretched for 3 days to justify the high fee. He found the training techniques taught at the course to be not successful.

He later obtained a training DVD from another source, for free. It teaches him how to trade using candlesticks. He found this to be more useful. 

Tuesday, September 20, 2011

Foreign exchange training courses - misleading statements

If you have attended a foreign exchange training course and have paid several thousand dollars, and found later that you were misled, please write to I am helping a friend to lodge a complaint about these courses and more evidence is needed.

Save on interest payment

It is important to have an emergency fund that can be used for your unexpected payments. This can save you a lot of interest payment.

Suppose you need $5,000 in an emergency - for medical expenses or disruption in your income. If you borrow $5,000 on your credit card, you have to pay interest of $100 a month (2%) on the roll over. If it takes you 2 years to make the repayment, you would have spend an additional $2,400 in interest payment, on top of the $5,000 that you borrowed (and have to repay).

If you have emergency fund that you can draw down, you can save on the hefty interest payment. But you should have the discipline to repay the borrowing back into your emergency fund - just like you have to repay an external lender.

You should  build an emergency fund of 6 months of your earnings. If you earn $5,000 a month, your emergency fund should be $30,000. You should keep the emergency fund in liquid investment, such as fixed deposit or short term bond. You should avoid investing it into a life insurance policy or structured product where there is a high upfront cost (which becomes a penalty on early withdrawal).

Remember - building up the emergency fund is your top priority - above buying a car or other discretionary expenses.

Foreign exchange training courses

Dear Mr. Tan,
I am a Singaporean PR with a background in the financial services sector. I am quite appalled at much of what goes on here in terms of mis-selling of products and services by the finance-related sectors. I am glad that you have managed to take on some of these issues and wish that the various authorities here in Singapore would be more active.

For the last couple of years I have had various dealings with such groups as MAS, ABS and CASE in my efforts to have some of these bad practises stopped and have had periodic successes.

However there is one issue that I just can't seem to make any headway on that I feel is something that somebody really needs to tackle and that is the selling of "get-rich-quick" type foreign exchage trading courses. This activity has been going on for years here and is essentially an on-going fraud that takes place in full public view, most notably via advertisements in the Straits Times.

The groups behind these schemes have made millions and millions of dollars here carrying out an activity which would be banned in most countries. It saddens me every time I open the newspaper when I see these advertisements because I know that it means yet more people will today be conned out of their hard-earned savings, or taken into debt, in order to attend one of these courses.

I would like to urge you to try to tackle this issue. I think that if you could do so you would be doing the Singaporean people a great service. Many millions have been swindled, but lets not let this practise go on for yet more years. I have realised that my efforts with the MAS, CASE, ABS etc are coming to nothing in this area so I realise it needs somebody of your status to be involved in this if anything is to change.

Please let me know if you would be interested to look into this issue and I would be very happy to help in any way I can starting by briefing you on what I believe are the illegal practises carried out by these groups in full public eye,


Social inequality in Singapore

Yee Jenn Jong is a non-constituency Member of Parliament from the Workers' Party. He writes regularly on social and economic issues. Read this article on social inequality in Singapore.

Monday, September 19, 2011

Social insurance - to pay for large medical bills

My friend asked me to help publicise an appeal for a little girl called Chloe who has a rare disorder called Pompe Disease and needs $200,000 to $300,000 a year to be treated. This is a lot of money and is likely to be beyond the means of compassionate, ordinary people.

This issue raises the following questions:
  • Should something be done to help people like Chloe who are borne with a rare disorder? 
  • Should the state take this burden from the parents?
  • Can a solution be found using private insurance?
I must first rule out private insurance as most people are not likely to take up insurance against the unexpected and undefined risks of life - until it happened. There are other problems associated with the profit motive of insurance companies, leading to dispute on claim settlement or unfair rejection of legitimate claims.

The best approach is through social insurance, i.e. insurance provided by the state. It should cover all  eligible people and be funded by taxation or compulsory contribution (that can be adjusted based on actual experience) or a mix of both sources of funding.

Some issues to be considered by the state are:
  • Should the social insurance pay for expensive treatment that boost the profit of pharmaceutical companies?
  • Should there be a cap on the amount that are to be funded by the state?
Some possible approaches that are helpful are:
  • The compensation should be for the actual cost of treatment and can be subject to a cap of say $100,000 and should be used under proper guidance.
  • The cap may not be sufficient to meet the needs of serious cases, but it does help to provide some relief to the parents. It may be possible for the pharmaceutical company to reduce the cost of the drugs. 
  • More importantly, there could be many cases where this type of compensation would be helpful to the parents.
It may be difficult to design a social insurance scheme, but this should not stop us from giving attention to this matter. If nothing is done, then the burden has to be met by the parents or family members (who may not have the financial means) or the patient will not be treated due to lack of funds. 

It is not a good approach to leave these problems to charity. Apart from the high cost of collecting and accounting for the donations, there is the risk that some of these cases may be exploited by unscrupulous people who wish to make a personal profit from the effort. (However, in Chloe's case, I find that the donations will be administered by the hospital).

Tan Kin Lian

Mobile optimized website

Dear Mr Tan,
My company is launching an exciting mobile marketing platform to local companies and entrepreneurs to help them reach out to large and increasing mobile market in Singapore.

Qrion Entreprise specializes in designing mobile-optimised websites that can be saved as mobile apps by customers.

We would like to seek for a business opportunity with your esteemed organisation to market your events, mobile applications and book publications on a mobile platform that people can access while they are on the move. One of the key benefits of this mobile platform is that interested parties can call/ SMS/email the organizer directly from their mobile phones.

We strongly believe that harnessing mobile platform to publish events will gain popularity as more people are getting themselves connected to the internet wirelessly through portable devices such as smart phones and tablets.

Qrion provides the enabling platform for event organisers to design their mobile websites with our easy-to-use Mobile Site Creator and Content Management System. We can also design mobile websites upon customer request.

You can view our sample mobile website indicated below (Note: please view by smart phone or tablet):

- Event Publicity (

- Products/Services Showcase ( and

If it is convenient, we will also appreciate very much if you can mention our mobile marketing services in your public blog.

William Ng

Qrion Enterprise

Sunday, September 18, 2011

Outsourcing and drop in standard

I went to Paris for a board meeting. The company arranged for me to be picked up at the airport. I was to look for a person holding a sign with my name.

When I arrived, I could not find the pick up person. I searched for him. He arrived 15 minutes later and was clearly not a local person. After driving for some time, he appeared to be driving me to the wrong destination. I checked with him and gave him the correct address.

I reported the matter to the hotel for investigation. Apparently, they have arranged the pick-up to a contractor who must have outsourced it to a third party (who used an immigrant to do the work).

This was probably done in the interest of brining down the cost or making a bigger profit margin. This has led to a drop in standard and quality. There is a need to have better control on outsourcing!

Buying a property on dual income

Many people depend on dual income to calculate the affordability of their property purchase. This is highly risky as any one party may lose the income, causing financial difficulty. Read this article.

Tip: when you use dual income to calculate affordability, you should apply a discounting factor for the dual income. I suggest a discount of 30%. You should take only 70% of the dual income to calculate the amount of the property that you can afford to buy. 

Buying gold bar at inflated price

Mr. Tee had a friend who introduced an attractive investment scheme to him. The friend, whom he trusted, told him to invest in a gold bar. It promised to pay 2% interest every 3 months. After 12 months, the company promised to buy back the gold bar at its full value. This allowed him to earn a return of 8% for 12 months. There is also a certificate for him to take out the gold bar from a trusted third party if the company did not honour the buy back promise.

At the end of the period, the company did not buy back the investment. Mr. Tee took out the gold bar and found that he had paid for the gold bar at a price that is 50% higher than the real value of the gold. He was not aware that the price, quoted in $ per gram, was much higher than the price in USD per ounce that was quoted in the world market.

Fortunately for Mr. Tee, the value of the gold had appreciated, so he did was somewhat compensated. But, he could have made a larger gain by investing in gold directly, rather than investing in this scam. The friend who sold the investment to him was honest and did not realise the scam. She had also invested her own money and found out later about the scam.

There are many investment scams of this kind. They distract the investor with some gimmick, such as an attractive yield and a buy-back scheme. There is usually a catch that the investor was not aware of.

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