Saturday, December 31, 2011

A pro-active regulator acting on behalf of consumers

Verizon (a telephone operator in the US) wanted to charge a "convenience fee" of $2 to its customers making a payment through the telephone. It drew protest from consumers. The regulator, i.e. the Federal Communication Commission, felt that it was their duty to look into this fee "on behalf of consumers" to see if any regulation has been infringed.  Verizon changed its mind and decided to withdraw this fee.

Read this report "Verizon scraps $2 fee"

The approach of the regulator in America seem to be quite different from the regulator in Singapore. The US regulator felt that it was their duty to look after the interest of the people. The Singapore regulator would probably say that this is a commercial decision, and that consumers could go to another service provider.

I prefer the US approach.

Today Voices: Automatic notification for Payment

Editor, Voices, Today

I CONGRATULATE the Singapore Land Authority for introducing an electronic system to allow lawyers to notify the banks of details of payments paid into conveyancing accounts, instead of using hard copy forms. This is a useful step to reduce paperwork and improve productivity.

I notice however, that this is an initiative taken by an agency to cover only a small section of the transactions. It still requires the payer to take a separate step to send a notification to the payee.

I urge our banks in Singapore to introduce a common system for electronic payment and notification. This system can ride on the existing security infrastructure of the banks to validate the payers and allow them to make electronic payments through a common payment gateway to the payee accounts. The process should include an electronic notification to be sent to the payees. 

This type of arrangement has been in force for several years for payments through PayPal. It is time to update our antiquated payment process to match the best in practice in other countries, and to reduce the large volume of cheque payments and notification letters that still flood our mailboxes.

I hope that the Monetary Authority of Singapore and the Infocomm Development Authority of Singapore will take the lead to make this long-overdue change.

Tan Kin Lian

Friday, December 30, 2011

Managing personal risks

Here are some tips on when you should buy insurance and when you should self-insure (i.e. retain) the risk.

Electronic payment and notification

The Singapore Land Authority has introduced a useful system to allow lawyers to notify banks of payments through an electronic notification, instead of manual forms. More details here:

However, this still requires a separate exercise for the payer to notify the payee. A better system is to allow the payments to be notified automatically - similar to payment through Pay Pal. The banks in Singapore should adopt a common system to allow all payments to be transferred electronically and notified automatically. This system should cover all types of payments, and should not required any agency, such as the SLA, to set up a separate system for the notification.

Legal responsibilities in the Internet

Many people do not realize that hacking is a crime and that defamation through the internet can be prosecuted as a civil suit. Read this article to get a better understanding of your legal responsibilities.

Stop taxis from cruising the road - a suggestion from Mr. Lee WL

Please share your views to this idea contributed by Mr. Lee WL

My idea:
- Taxi companies to build big carparks in different parts of Singapore to house all the taxis.
- Taxi drivers can take a rest, surf internet and interact with one another in rest areas.
- Each driver will take queue up for taxi booking calls from customers
- They will drive to the customer's location only when they get a booking
- They will drive back to one of these "big taxi carparks" to queue for customers again

- Reduces fuel wastage (substantially). No taxis cruising on the roads. Environmentally-friendly.
- Reduces fuel costs for taxi drivers (substantially).
- Less road congestion. Empty cruising taxis on roads are not using the space they occupy on public roads "productively".
- More rest for taxi drivers. They need not cruise around Singapore to look for customers. Probably will reduce accident rates too.
- More productive use of time. They can use the queuing time at rest centres to rest, surf internet, self-study, interact with other drivers and do other more productive things.
- Possibily cheaper taxi rides. Because of substantial reduction in costs.
- More people may be more open to becoming taxi drivers because of better working conditions and higher pay (is it possibe?)

- Longer taxi waiting time for commuters. Taxis need time to travel from these "big taxi centres". Possible solution: when commuters get used to this new system, they will call to book taxi before they leave their homes. This reduces the waiting time. When this system is in place, it will also mean that commuters need not waste time trying to flag for taxis along roads. They know that the only way they can get a taxi is through booking calls.

In conclusion, empty taxis cruising on public roads is:
1. Waste of the drivers' time
2. Unproductive use of space on public roads
3. Not environmentally-friendly
4. Increases costs of operating taxis

Mr. Lee WL

Thursday, December 29, 2011

An app for the elderly

This is a useful app to trace the location of elderly people and children.

A fair compensation for infringement of copyright

About six years ago, a website owner sued more than a hundred companies and government bodies for the unauthorized use of the digital maps provided in their website. The amount claimed was over $3,000 per map. The amount claimed was clearly exorbitant, as the loss of revenue suffered by the website or the cost of producing the map was nowhere near the amount claimed.

It was likely that nearly all of these parties were not aware that they were infringing the copyright. Some of these used parties had used more than 10 maps, so the total amount claimed was quite substantial.

To my knowledge, most of the infringing parties settled the claims out of court by paying the website owner close to the amount claimed, perhaps after a small discount. It was quite sad that the leaders of these large companies and government bodies were not prepared to fight in court against an excessive and unconscionable claim, and were prepared to pay a hefty sum of money (using the monies of their shareholders and taxpayers) just to avoid the negative publicity about being sued.

The website owner must have collected several million dollars of settlement from these parties. The legal claims were handled by a lawyer that specialized in making these legal claims. The lawyer firm must have collected a large amount of legal fees from these cases.

I personally knew about a company that was sued. The staff had used more than 10 digital maps a few years earlier and was not aware that he was infringing the copyright. That company refused to pay the exorbitant claim but offered an amount representing their estimate of the cost of producing the maps. The website owner took the case to court but finally dropped the case. Details of the out of court settlement was not disclosed. This was perhaps the only case that went to court.

I heard another story (but not verified) that a local university had paid more than one million dollars to settle a copyright claim where a student had uploaded a video, without permission, into the university's website. I was shocked at the purported amount of the settlement over a trivial matter, especially as the payment was probably made out of public funds. I could not image any justification for the video clip owner to receive such a large payment,which is tantamount to an extortion! This could be just a rumour.

Nevertheless, I wish to call on our Ministry of Law to pass a law to clarify the principles to determine the amount of compensation that should be paid for the use of copyright materials. The lack of clarity has led to an unsatisfactory situation where legal firms, which specialize in making these types of claims, could claim exorbitant amounts, and the sued parties were forced to make exorbitant payments due to the lack of clarity.

ST Online Forum: Consider a semi-regulated taxi system

Published in Straits Times Online Forum:

AFTER deregulation, the taxi service has become progressively worse over the years and there is much public unhappiness ('Cab fares: Deregulation hasn't improved service' by Mr Liew Chin Wen; 'Takings down, but...' by Ms Koh Lee Suan; and 'Fare confusion' by Dr Gil Simon Schneider; all last Saturday).

Taxi fares have become more complicated, confusing and expensive over the years. Taxis are not available at certain times of the day, not because of high demand but because of an artificially created shortage.
It is time to recognise the failure of deregulation and to move to a semi-regulated system.
I suggest that the Land Transport Authority (LTA) introduce a regulated basic taxi service that operates as follows:
- All taxis picking up passengers on the road or at taxi stands should have regulated fares.
- The regulated fares could be based on a fixed flag-down rate plus a fare based on distance, or a higher fare based on the trip time, to compensate the taxi driver for traffic congestion, for example 60 cents a km or 40 cents a minute, whichever is higher. Electronic Road Pricing (ERP) charges can continue to be added.
- There is no need for peak-hour surcharges, as the taxi driver is already compensated for time spent in slow-moving traffic.
- A centralised taxi booking system can be operated by a service provider appointed by the LTA to match taxi drivers and customers for a flat fee of $1.
- The fares can be reviewed at six-monthly intervals by a fare-setting body with the aim of matching supply and demand.
- Individual taxi drivers, as well as taxi companies, can apply for a licence to participate in this basic taxi service.
The taxi companies can continue to operate their special services, based on their terms, conditions and fares, but they would have to take bookings through telephone calls from customers who are aware that they are paying a higher rate for the non-basic service.
A mixed system with a regulated basic service, complemented by deregulated special services can best serve the needs of commuters and taxi drivers, and bring some order and simplicity to the current chaotic situation.
Tan Kin Lian

Copyright and the free flow of information

There is an article in Today paper written by William Patry, who is an author of a book on copyright and the senior legal counsel of Google. The arguments given in the article entitiled "Promote creativity? Encourage copying" are convincing. Although Google has a strong interest to promote the free flow of information, I support their stand. I believe that right of the copyright owner to claim for payment should be restricted to the amount that  can claim for actual loss due to the copying activity.

Read the full article here:

Wednesday, December 28, 2011

Who's in charge of bird nuisance

Read this CNA report about the bird nuisance and the uncertainty on which agency is in charge of the problem.
This type of problem and is typical of Singapore and is part of our culture to push responsibility from one party to another.

The answer to this problem is straight forward. We have only one Government. The problem can be taken by any government agency and is then passed internally to the right agency to handle the problem. The uncertainty should not even be known to the public. 

Here are the survey results

Smart Alec and the dubious investment products

Some Smart Alec still hold the view, similar to our PAP leaders, that the ordinary people should be more carefully about their investments and deserve to be cheated if they venture into unfamiliar areas. These people overlook the following points:

  •  Some of the investment products are downright scams; other products are dubious and take advantage of the less savvy
  • The unwary investors were forced to consider other investments as the interest rate on bank deposits had fallen to nearly zero!
  • These dubious products are created by "talented" people who have no qualms about ripping off the unwary
  • The people who sell the products to their friends might even have been unaware about the toxic nature of these products
  • The dubious products are being sold under the banner of the financial institutions that they had trusted for decades.
If the argument of these Smart Alec were to be followed, then there is no need for the Government to test pharmaceutical products. The public should be careful about buying the products that are being sold to them. If they are not familiar with these pharmaceutical products, they should not consume them. 

We know that the argument does not hold in the case of pharmaceutical products, and that the Ministry of Health takes the responsibility to test and approve the products. They do not expect the doctors to take this responsibility.

One day, the victims of these dubious investment products will be the family members of these Smart Alec. Then they will realize what harm they have been causing to their loved ones.

Re-structure the economy - reduce the financial industry

During the past two decades, too many talented people entered the finance industry. Wall Street attracted the top graduates from the best business schools. These firms, with their talented people, created financial products that built up asset bubbles and encouraged speculation. The excesses had been damaging and nearly caused the collapse of the global economy.

The financial firms are now cutting down on their payroll. The top graduates could not find jobs in these financial firms any more. They have to look for opportunities elsewhere. This new trend, away from the financial industry, will be good for the economy.

We faced the same challenges in Singapore. In past years, the top graduates have opted to join the large banks - which were able to pay top salaries due to the profits that they made through the sale of dubious financial products and through unproductive speculative trading. Even the people who do not quality to be top graduates opted to be property or insurance agents, to earn high commission.

If too many people enter into these industries, which are the non-productive sectors of the economy, there will be less people available to do the productive work - to build products, to provide personal services or to prevent crime and upkeep the law.

The high cost incurred in the financial sector, i.e. the high salaries and commissions, could be justified if the value of the assets keep going up in a bubble. However, when the bubble burst, the damage could be severe for the economy and the losses have to be borne by the ordinary people - through loss of jobs and drop in their asset values.

America has found it difficult to re-structure their economy. Although the political leaders now realize what need to be done, the vested interest in the financial industry are fighting hard against change.

Singapore is still in the dream world of glorifying the financial industry and still aims to be a financial hub. It will be more difficult for our leaders to realize the harm that is being caused by the excesses of the financial industry and have the courage to make the change.

The flaw in the concept of Value at Risk.
Morgan Stanley cuts jobs.

Tuesday, December 27, 2011

National Service for Permanent Residents

According to this article in The Online Citizen, one in three permanent residents renounced their citizenship to avoid serving National Service. There is a suspicion that these renouncers might have subsequently been given favourable treatment in getting a place in our universities. If this suspicion is found to be true, it would make a mockery of the sacrifice that is being made by our male citizens in serving the country.

I understand the difficulty faced by the Government in this difficult situation. They are keen to have more people become citizens or even to remain as permanent residents, rather than to lose them due to National Service. Regretfully, this difficult situation has been created by the Government due to its own inconsistent policies.

A better approach would have been to make it a privilege to serve National Service. Many who had served National Service have said that the experience was beneficial to them in improving their character and maturity. The disadvantage was financial.

It would have been better if the Government had paid a generous allowance for people who served full time National Service - an allowance that is comparable to what they would have earned if they had been working in the private sector. Alternatively, the Government could have given them a housing grant of (say) $30,000 for their 24 months of National Service, which would have helped them to afford a HDB flat. The Government is already giving a housing grant to many people, as the HDB flat would have been unaffordable without the grant. It would have been better for the grant to be tied to the completion of full time National Service.

If such a scheme had been in place, it would have been a win-win situation for most people. Many of the permanent residents would have opted to serve National Service for the generous housing grant and the benefit of character development. Singapore would not have lost so many permanent residents that it would have wished to keep.

I know that the Government would have another difficult question of how to deal with past generations of people who served National Service in earlier years. It would not be difficult to find a fair solution - although I do not have any ready answer. When there is a will, there is a way.

What are your views?

Monday, December 26, 2011

Sunday, December 25, 2011

Survey - recommendation on Minister's salary

Gerard Ee's committee is expected to hand over its report by 31 December. Guess what will be their recommendation.

VBox from SingPost

Shaun Lee introduced the VBox from SingPost. Any body used this service before? What is your experience? Is it useful?

Two perspectives - Sim Ann and Lucky Tan

Lucky Tan makes two interesting points that challenges the prevailing PAP point of view:

  • Some people abuse welfare, so we have to make it difficult for people to abuse the system (Lucky Tan said that this makes it more difficult for genuine cases to get help).
  • Europe has fallen due to its welfare stage (Lucky Tan said that the problem in Ireland and Spain is due to the bursting of the property bubble).
I agree with Lucky Tan on both points. We have to be careful that Singapore is also riding on a property bubble. While it is still going up, we may feel happy. But, we cannot escape the fate that has happened in many countries.

Read more in the article by Lucky Tan. And share your views here.

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