Motorists to be hit in the pocket again

A new GPS system of charging self-drive commuters

adds pressure to switch to public transport.

 

(Photo: Spluch)

 

In time, the GPS method of charging may become

even more unpopular

than the current electronic gantry system.

 

Some people believe it would be implemented

either long before or after 2016, the next general election.

 

http://thestar.com.my/news/story.asp?file=/2012/10/13/focus/12161347&sec=focus

Some gold trading is Ponzi scheme

Dear Mr Tan

Today's straits times A37 - "Bank Negara:  Some gold traders run Ponzi
schemes.  KL Central banks raids four firms, has another 20 on
consumer alert list"

It is interesting to know what our Authorities intend to do?  Are they
currently allowing some of these companies to liquidate their assets
before taking action or they just deem that their schemes are not
under their preview and they should not take any action.

This has happened in the past with the Minibonds and we are still
allowing such things to happen.
David

Paying a high interest rate for borrowings

Dear Mr Tan,
Please help to share this sad story in  your blog.

Bob (not his real name) is now 51 years old, a local Singaporean Chinese. Less than 6 six years ago, he  married a young Vietnamese lady through a marriage agency. She was in her early 20s and he was then 45 years old.

Today, he is in debt partly due to his gambling habits and partly due to his generous care of his young wife by providing for her immediate family in rural Vietnam, inclusive of building a family house for them. He also gave a significant portion of his net monthly income as allowance to his wife and paid for multiple trips for her and her mother to visit Singapore. Bob is not rich, just a typical heartland Singaporean with gross income slightly above $3,000 but he has a fully paid HDB flat fund through CPF through his years of hard work.

Bob owes at least six banks through easy credit scheme and cash advance from his stack of credit cards to the tune of $80,000. This debt amount was accrued during the past nine months due to his casino gambling trips. Recently, he even turned to another four "licensed" money lenders to loan for a smaller sum. This easy cash loan is directly deposited into bank account and accordingly to Bob, most of them don't have a shop or office front and there is no formal loan agreement, just through handphone conversations and SMS texts and weekly debt servicing payment also through ATM to a designated account given to him.

Looking into Bob's debt issues, is there anything an individual could learn?  Also, is there anything that our MAS could have done better to control easy credit card applications and approval?

In this case, if an individual earns only a gross monthly income of $3200, can he owns so many credit cards that allows him to have such easy cash advance to the tune of two months of annual salary for each credit card in his hand?  Also, Bob has to pay a weekly 5% interest rate (i.e. annualized rate of 260%). Is there no guidelines in which MAS can impose upon such of debt which many licensed money lender operation to control the max? Bank typically impose a 2% interest rate per month (annualized rate of 24%) for credit cards loan. I have not even mentioned about one last category of dangerous debt which many are exposed to i.e. loan sharks. 

One just need to walk into the numerous counselling sessions that are held all over the island to understand the full extent of the debt and loan issues which both Singaporean and non-Singaporean of all races are been traumatized. Bob now has to sell his HDB flat so that he can pay off his debts and he is also in the midst of a divorce proceeding initiated by his wife. He couldn't avoid to hire his own lawyer, but yet agreed to pay for his wife's lawyer for this uncontested divorce.

Upgrading of Shield plan turned sour

Mr. Wee (not his real name) is in his late 50s. On advice from his friends, he upgraded his Medishield to a private Shield and paid a higher premium. He thought that this would provide higher coverage for his medical expenses, but it turned out to be a nightmare for him.

A few months later, he had a heart condition that required him to be hospitalized on three occasions. Although his private Shield plan allowed him to use B2 ward, he opted for C class ward. The total bill for the three visits was $14,000, which was initially deducted from his Medisave account.

The insurer refused to pay the claims on account of non-declaration of a cancer treatment that occurred 20 years earlier. As there was no recurrence of this problem, Mr. Wee thought that it was a non-issue. The insurer also found that he did not declare his high blood pressure that was under control.

Mr.Wee had been insured under Medishield since its inception. Instead of paying the claims (which is fully recoverable from Medishield), the insurer wanted to cancel the private Shield insurance from inception,  and required Mr. Wee to make a claim directly from Medishield  But Medishield told Mr. Wee that he should claim under his private Shield, as Mr. Wee had transferred his policy to private Shield for half a year. It would be quite difficult to transfer the insurance back to Medishield retrospectively.

Mr. Wee had to move from one party to another and after a few months, his claim was still not paid. He advised the public not to upgrade to a private Shield from Medishield and faced this type of stress.

Singapore Transport rank top

In spite of glitches, Singapore transport still rank top among global cities.
http://www.businesstimes.com.sg/premium/singapore/spore-transport-infrastructure-rated-tops-20121011

I agree with this assessment. However, there are several simple and low cost measures that can be introduced immediately to make travel more comfortable for commuters.

Effective way to solve a problem

This story shows the difference between an effective and wasteful way to solve a problem. I find many cases of wasteful ways in Singapore and will share them. We need to recognize the wasteful ways and implement measures that are effective in achieve the results and reduce the cost.

Make a Police Report on gold bar investment

Mr. Wong (not his real name) invested over $1 million in the gold bar scheme of the gold trading company that was recently in the news. It represented his entire life savings. He was not aware that the company was on the MAS Alert List. He stopped receiving payment and, to make matters worse, he had deposited his gold bars with the company. He is afraid that his entire savings would be gone. Mr. Wong asked for my advice on the steps that he should take now.

I told Mr. Wong that he should make a Police report. This report may be useful to the Commercial Affairs Department, as they had recently started to investigate the company.

I told Mr. Wong that there is no point to engage a lawyer at this stage, as he would be incurring legal fees and, even if he obtained judgment against the gold trading company, they would probably ignore the judgment.

Other investors in the same situation as Mr. Wong should lodge their Police report as soon as possible, unless they are informed by CAD that this is not necessary.

Slow access to data

Recently, I experienced slow access to data on 3G and broadband, in my home and the office. I used two providers, i.e. SingTel and Starhub. Have you also experienced the slow and unreliable response?

Ten Years of Risk Management Debacles

http://www.cnbc.com/id/49328091/

There were 5 big debacles, all of which involve trading and derivatives of banks and security firms.

1. J P Morgan, derivative trading, loss of $5.8 billion
2. MF Global, European bonds, loss ??
3. Merrill Lynch, morgage, loss ??
4. Citigroup, CDO, loss of $60 billion
5. Morgan Stanley, mortgage, loss of $9.6 billion

Citigroup loss is the biggest! These are due to failures of risk management oversight!

Facecard - what details to include?

If you are not sure how much details to include in your facecard, you can start with your name, e-mail address, telephone (optional) and company (or school). This should be sufficient. You can add more details later on. Just give it a small start. And send a link to your friends.  

Increase in motor premium rates

Motor premium rates have increased by an average of 10% per annum over the past four years. This is not due to bad driving. What is the cause of the increase? Find the reason here. http://tankinlian.com/admin/file.aspx?id=687&IID=691

Providing a service to the public

The purpose of insurance is to cover losses due to unexpected events. These are accidents and are not intentional.

Most people driving on the road do not wish to have an accident as it would lead to loss of life, injury or property damage. Sometimes, they are not careful and may miss or misjudge the timing of a red light. This is how an accident happens.

When they meet with an accident, they already pay a heavy price, through the payment of the Excess and the loss of the No Claim Discount. This can amount to a big financial loss, especially to a person on a tight budget.

Do they regret their carelessness? Of course, they do. This is how people learn through experience.

The purpose of insurance is to cover these types of unexpected events. It is not the duty of the insurance company to "punish" the driver, and act like the prosecutor and judge. Any such punishment should be left to the relevant people, who are trained in such matters.

Is it right for the insurance company to reject the renewal of the insurance and to impose an excessive loading to recover their loss? This is a separate issue.

If I were the regulator, I would impose certain conditions on what is fair, and what is unfair. If an insurance company behave unfairly to consumers, they should not have the licence to transact insurance business. This is not just a business - as there are responsibilities to the public to act in a fair manner.

Property price rise will lead to inflation

 

I AGREE with the views

of Mr Goh Khee Kuan ("No reason to fear if property prices fall"; last Friday)

and Mr Harry Leong ("Think of the Singaporeans to come"; last Friday).

 

Most retirees should be very concerned

if inflation keeps creeping up as it will erode their savings.

 

Inevitably, there will come a time

when some of us may have to downgrade our property,

move to retirement homes

or migrate to a cheaper country to survive.

 

Online

http://www.straitstimes.com/premium/forum-letters/story/the-inflation-threat-property-price-rises-20121009

 

 

Refusal to renew insurance

 AM DISMAYED by letters supporting Mr Tan Yau Cher

("...'Compulsory' rule must apply to insurer too"

 by Mr Leong Kok Seng, last Wednesday; and

 "4 ways for fairer renewals"

 by Mr Tan Kin Lian; last Thursday)

over NTUC Income

("No insurance renewal for dangerous driving", last Wednesday);

the first of two Income replies defending its decision against renewal.

Motorists must accept the responsibility and financial issues

that come from driving and vehicle ownership.

... let us not be unreasonable towards insurers,

for they are the ones that enable us to drive daily.

http://www.straitstimes.com/premium/forum-letters/story/income-right-refusing-renewal-20121009

Zeng Yanzhi

My comments

There are many people who share the same view as Zeng Yanchi. They seem to think that people who drive carelessly do it on purpose.

When they meet with an accident due to a careless mistake, they will learn that accidents can happen even to careful drivers. By that time, it will be too late and they have to suffer the same fate as Mr. Tan Yan Cher. I hope that they will then be brave to accept the consequences and not ask me for help.

Poor record? It's our only claim

NTUC Income chief executive officer Tan Suee Chieh's reply

("Income defends renewal rejection"; last Friday)

to my letter

("Don't let insurers leave car owners in renewal fix"; Sept 29)...

 

Yes, my younger daughter made a serious driving error.

 

However, mistakes on the road are not uncommon,

and that is why motor insurance is mandatory for all vehicles.

 

While Income's intention in preventing reckless driving is commendable,

the decision as to whether it should be the reason to punish her

should be a legal, and not an arbitrary one.

http://www.straitstimes.com/premium/forum-letters/story/poor-record-it-was-our-only-claim-20121009

 

Advice from Jack Bogle

This is excellent advice for investors looking for better yield over the long term
http://www.cnbc.com//id/49274230

Name card on the Cloud

You can put your Name Card on the Cloud (go to www.cfacecard.com).  Here are the advantages:

1.  If you are involved in marketing, it is easy for a potential customer, especially someone who knows you previously, to search for you by name. He or she might have lost your business card.

2. If you are a retiree, the people who know you before, e.g. former colleagues, friends, classmates and neighbors, can search for your name card.

3.  If you are a student, it is a good way to build up your future contacts. You can keep in touch with people that you know and be updated when they change their jobs or contacts.

Those who use LinkIn now will know the advantage. Here is an additional channel, and is easier to use. Try it. A mobile version will be available in Apple App Store soon!

www.cfacecard.com

Discount on FISCA talks

FISCA members will now enjoy a $20 discount on attending the FISCA educational talks on financial planning, investments, insurance and other consumer-oriented talks. Each talk is for 3 hours held in SMU or other venues. The fee is $30 for the public and $10 for members.

The membership fee to join FISCA is $36, so by attending two talks, the member already gets back more than the fee. There will also be a subsidized dinner talk for members to meet each other and exchange views.

To register, go to www.fisca.sg and click on Register. Details of the talks are shown under Event. The articles posted in the website can be found under Information.

Mobile apps from TKL Associates

Here are some interesting apps developed by Tan Kin Lian & Associates
http://www.facebook.com/tklassociate
You can take part in a weekly contest and win prizes.

Regulate the banks

PM Lee said that it is difficult to regulate the banks more tightly
http://www.straitstimes.com/breaking-news/singapore/story/regulating-banks-tightly-not-always-feasible-pm-lee-20121008

The other extreme, which he seemed to favor, is to let the market takes care of bad behavior of the banks.

There is a middle path. The regulators can be more active in regulating the products offered by the banks. Many of the financial products are bad, and should be stopped in the first place. Paul Vocker recently said that the only useful innovation in the financial sector is the invention of the ATM. He suggested that all the other financial innovations are dubious. Link.

The Frank Dodd bill on financial regulation and protection of consumers mandate the regulators to approve plain vanilla financial products. This is a necessary step.

Name card in the Cloud

Many people print out Name Cards to introduce themselves to their contacts. The trouble is - the contacts may not keep the name card in a Box or enter the details into the contact book.

Here is a better option. Create a Name Card in the Cloud. Your contacts and friends can find your details there, when they need it. And retrieve your name card into their virtual Box.

You can also send a link to your contacts, so they can keep a link in their Box. And what's more, each time you update your card, all your contacts will be notified immediately and can access your latest details,

This is called your FaceCard. You can create it at www.cfacecard.com.

Gold trading scheme

My friend attended a Gold seminar and gave me this report a month ago.

QUOTE: The company was rated among the Top 100 SMEs in Singapore. They showed pictures of the boss with political and influential people and favorable write-up by media.The company said that they are trading in gold and the GST on the trading will be waived in October, as part of a plan to make Singapore into a GOLD HUB.The investor buys 1 kg of gold for $91,000 and is given the gold bar on full payment. The investor is paid 1.7% or $1,500 every month for 3 months. After three months, the investor can renew the contract every quarter. If the investor return the gold bar, the company will pay you back the $91,000. The price of the gold bar is 20% higher than market price.It attracted many retirees with money. UNQUOTE

Here are my views.
If a stranger approaches you and ask you to give him $18,000 and he will pay you $1,500 a month, will you trust him? If this stranger tells you that he is approved by MAS, will you take his word for it? After collecting your money, the stranger can run away with it. He can also lied to you about being approved by MAS.

Even if the gold company is able to pay the return to you for a few months, it is likely to be a Ponzi scheme. The company takes money from the later investors to pay the earlier investors and pocket the difference! When new investors stop putting in the money, they will fold up and run away. This has happened many times in the past. It is not possible for the gold tracing company to earn a return o 17% from gold trading.

How to cool down a hot drink quickly

http://www.wikihow.com/Cool-a-Hot-Drink-Quickly

Have you ever wanted to drink something but it was too hot? These methods will help bring down the temperature. It is especially good for cooling down tea for people who don't like it too hot.

1) Take your drink and pour it from one cup to the other cup. Repeat until your drink has cooled down.
2)  Put one or two ice cubes in your hot drink.Stir your drink.
3)  Trying pouring some milk into your drink. Stir well.
4)  Get a fan, and aim the fan at your drink. If you do not have a fan, try blowing on your drink, but not too hard.

Read this also
http://www.thekitchn.com/how-to-cool-a-hot-beverage-the-105287

Investor Alert List

I disagree with the approach taken by the Monetary Authority of Singapore in putting up an Investor Alert list. http://www.straitstimes.com/breaking-news/singapore/story/investor-alert-list-helps-investors-dodge-dodgy-deals-20121007

A better approach is to have a conversation with the promoters and to ask some relevant questions. They can tell the promoters that they are potentially breaking the law on deposit taking and money laundering. If the promoters insist on continuing the activities, MAS could ask the CAD to investigate the matter.

A pro-active approach will be more effective in stopping potential scams.

Survey for the National Conversation

The following survey contains useful information for the National Conversation
http://www.tremeritus.com/2012/10/07/the-real-national-conversation/

IBM Global Survey of Commuter Pain

Singapore rank quite poorly compared to most advanced cities - a surprise!
http://yawningbread.wordpress.com/2012/10/06/middling-going-on-to-transport-hell/

Facecard - name card on the Cloud

I wish to introduce you to Facecard. It allows you to create your 
Name Card in the cloud. 

Here are the advantages of Facecard

• You can send the Facecard to your contacts by e-mail
• The link is automatically filed into the Contact Box of the receipient
• It is easy for your contacts to search for your Facecard online
• They will be automatically notified about updates to your Facecard
• You can provide your resume and other information in the Faceard

Here is the link to this web application:
www.cfacecard.com

If you like it, you can create your own Facecard and send it to 
your friends.

There will be a mobile app to access Facecard. It is now available on iOS and
will be available on Android at a later date.

I have applied for a Patent in USA for this application. I hope to get your 
support to make it popular.

Tan Kin Lian

Gold trading scheme

Bank Negara assured that

"the relevant enforcement agencies have mobilised the necessary resources to expedite the investigations"

 

Bank Negara update comes in wake of

investor doubts over any wrongdoing.

http://www.businesstimes.com.sg/premium/top-stories/more-light-shed-genneva-malaysia-probe-20121006

 

 

PETALING JAYA:

Three more gold investment companies in Kuala Lumpur

have been raided for suspected illegal deposit-taking.

http://thestar.com.my/news/story.asp?file=/2012/10/6/nation/12135512&sec=nation

 

 

GEORGE TOWN:

More than 100 consultants and customers of Genneva Malaysia Sdn Bhd here

continue to cry foul over the raid on the company.

 

Apparently, more than 10,000 customers and 500 consultants in Penang

were affected by the Bank Negara operation.

http://thestar.com.my/news/story.asp?file=/2012/10/6/nation/12135514&sec=nation

 

FOOLS' GOLD
A scheme that promises 24 per cent a year looks like a free lunch

and should be viewed with the greatest of scepticism.

How exactly is that return generated?

 

The Genneva saga is yet another hard lesson

for investors that chase returns that are just too good to be true.

 

By Genevieve Cua

http://www.businesstimes.com.sg/premium/wealth/others/perils-betting-investor-alert-firms-20121006

 

Property in Johore

My friend, who is a Malaysian PR, brought me to see a few condos in Iskandar. Most of them are being sold at M$500 (S$200) psf, are freehold in tenure and come with full facilities.  The roads are not congested, so driving is a pleasure. The residents said that Iskandar is relative safe, in spite of the reports in Singapore media.

We visited Danga Bay, Horizon Hills, Nusajaya, Medini, :Ledang Heights, Puteri Harbor and Gelang Patah.

Most of the 2+1 apartments have an area of 1,000 sf and sells for M$500,000 or S$200,000. This is a 2 bedroom apartment with a small room (+1) that is used as a study.

I am impressed with the 3+1 apartment in Danga Bay, which is on the outskirt of Johor Bahru and is 10 mins drive from the causeway. The size is 1,600 sf and it sells for S$400,000. It has 2 keys. One key leads to a 500 sf studio apartment. The other key leads to a 2+1 apartment of 1,100 sf. Both units are inter-connected.  The owner can live in 1 unit and rent out the other unit or the grandparents can stay in the adjoining studio unit.

I met a Singaporean at the showroom of the Danga Bay condo. He works as a property agent in Singapore but has bought a unit at Danga Bay. He said that the LRT will connect Danga Bay to the MRT station in Johor Bahru.

If you find a 99 year condos selling for $1,200 sf in the outskirts of Singapore to be too expensive, a property at Iskandar may be an attractive option, especially if your work requires you to travel often outside of Singapore.

More pro-active agencies

Dear Mr.Tan

Today's news reported that the regulator is curbing the loan limit to
35 years with some other restrictions in the approval process.  This
action came after our MND Minister Khaw commented the 50-year loan
tenure as a 'gimmick'.

This makes me wonder whether such implementations by Financial
institutions does need any approval from the regulator?   If yes, sad
to say this has short lived.  What can we learn from here?

In our fast moving society and especially in Singapore, companies and
financial institutions are forced to be creative and to come up with
innovative products for consumers, be they good or 'bad'.

Our children who have just graduated with 1st class honors or under
scholarships or with MBA, may be the ones assigned to approve these
products.  Due to their lack of experience and the convincing papers
put up be these financial institutions, they just approved the
products.

In the past we have the Lehman Brothers and Minibonds saga, off late
we saw the Profitable Plots, Genneve Gold and now the 35-year loan.

Singapore is well known for her very regulated financial system and
such processes has resulted in consumers being affected and now
redress need to be action by the the law or legal processes which are
costly for consumers.

What Singapore need is a pool of experts who have retired from the
industry to be in a product approval advisory board.  The authorities
could tap on their views before approving their products.   Like
Warren Buffett, people still sought his advise at his age.  In
Singapore we have a large pool of these experts who through whatever
reasons, their views are not sought.

It is no point approving a product and sales made to consumers, than
curb the product.  In some instances too many agencies involved eg
Police, CPIB, CAD etc before action can be taken.

Moving forward, what Singapore need is pro-active agencies.

David Soh

Defensive Driving

I wish to encourage motorist to adopt defensive driving. This is defined as follows:

The standard Safe Practices for Motor Vehicle Operations, defines defensive driving as "driving to save lives, time, and money, in spite of the conditions around you and the actions of others."This definition is taken from the National Safety Council's Defensive Driving Course. It is a form of training for motor vehicle drivers that goes beyond mastery of the rules of the road and the basic mechanics of driving. Its aim is to reduce the risk of collision by anticipating dangerous situations, despite adverse conditions or the mistakes of others. This can be achieved through adherence to a variety of general rules, as well as the practice of specific driving techniques.

Electric Vehicles

The progress has been disappointing. Article.

Rejection of insurance claims

Mr. Lee  send an email to ask me why I am speaking against AXA for their handling of the Ferrari claim and why I am supporting the renewal of the motor insurance for Mr. Tan Yaw Cher's car. He said that, as a consumer, he does not want to pay the claims caused by "reckless driving".

It is easy for people like Mr. Lee to hold this view, until they are placed in the shoes of Mr. Tan.  They will then know what it is like to be treated unfairly.

Let me first deal with the Ferrari accident. AXA said that they cover "accident" and do not cover "collision". I am amazed at this explanation. When two cars collide, it is a collision. The collision can be caused by "accident" which is covered or by deliberate intent, which is not covered. I checked AXA's policy and found that they do cover "collision" but they have the right to deny liability if the collision is caused by "willful intent" or "willful negligence".

I do not think that the Ferrari driver had the "willful intent" to cause the collision. It is not clear if the claim could be rejected due to "willful negligence". I did some research on what is "willful negligence" and found some reference about medical malpractice, but could not find any reference to its application on motor insurance.

There is a principle of contract law that if a provision in an insurance contract is unclear, the court will decide against the party that drafted the contract, as it has the duty to make the terms clear. This is called the principle of "contract of adhesion".

I will let the court decide on this matter.

Let me deal with Mr. Tan's case. NTUC Income said that the daughter was driving dangerously. I wondered how they arrive at that conclusion. There was no dispute that she was careless in driving through the red light. but was it just careless, negligence or recklessness?

I had once turn right against a red traffic light. At that time, the light showed green for driving straight but I did not notice the red arrow for turning right. Fortunately, the oncoming traffic stopped in time. While I was careless, I was not reckless.  It is quite easy to be confused with so many traffic lights - some of which are meant for pedestrians, especially when driving along an unfamiliar road or at night.

We have to wait for Mr. Tan or her daughter to reply to the accusation of "dangerous driving".

I am quite worried, on behalf of consumers, that some insurance companies appear to be trigger happy in rejecting claims, in spite of their contractual liability.

ATM Fraud

A member of the syndicate was sent to 6 years jail for ATM fraud
http://www.straitstimes.com/breaking-news/singapore/story/jailed-fraudulent-atm-withdrawals-20121004

Those taking money using another person's ATM card should be aware about the severe penalty.

US Presidential Debate, 2012

Mitt Romney did better at the debate

http://www.todayonline.com/CommentaryandAnalysis/Commentary/EDC121005-0000036/Obama-gets-a-rude-awakening

Affordable housing

No reason to fear if property prices fall
http://www.straitstimes.com/premium/forum-letters/story/no-reason-fear-if-property-prices-fall-20121005

Thinks of Singaporeans first
http://www.straitstimes.com/premium/forum-letters/story/think-the-singaporeans-come-20121005

These two letters reflect the conclusion of my small survey carried out a month ago. Most existing HDB owners do not mind a fall in the property prices. They think about the positive impact for their children.

How the future generation can afford homes
http://www.straitstimes.com/premium/forum-letters/story/concerned-over-how-future-generations-will-be-able-afford-homes-20121005

Income's rejection draconian,

 

Denis Distant

MR TAN Yau Cher,

the owner of the car driven by his daughter involved in an accident,

is penalised by NTUC Income

(Income's reply "No insurance renewal for dangerous driving..." on Wednesday

 to Mr Tan's letter "Don't let insurers leave car owners in renewal fix" last Saturday)

when it refused to renew his policy,

notwithstanding the 50 per cent no-claim discount earned after years of accident-free driving.

 

How about the younger daughter

if she buys a car and asks Income to insure it?

 

How about Mr Tan,

should he buy another car -

would Income refuse to insure it as well?

 

And if Mrs Tan or any of her children bought cars,

would they also be denied insurance?

 

What would Income do

had the daughter been driving a rental car?

Refuse to insure cars owned by the rental agency

because it rented her the car?

 

The action of Income seems draconian,

not just unfair.

http://www.straitstimes.com/premium/forum-letters/story/incomes-rejection-draconian-and-what-if-daughter-was-driving-rental-car-

 

Income defends renewal rejection

LONG-TIME CUSTOMER'S PLIGHT

 

Tan Suee Chieh

Chief Executive

NTUC Income

 

NTUC Income's decision

not to renew the motor insurance policy for Mr Tan Yau Cher's family

("No insurance renewal for dangerous driving..."; Wednesday)

in reply to Mr Tan's letter

("Don't let insurers leave car owners in renewal fix"; last Saturday)

has created much discussion.

 

First, the facts...

 

Arising from this,

we will make clearer in our motor insurance contracts

that if you drive recklessly,

you put the renewability of your car insurance at risk.

http://www.straitstimes.com/premium/forum-letters/story/income-defends-renewal-rejection-20121005

 

Action against gold trading firm

Many investors in Malaysia are angry at the action taken by action taken by Bank Negara to close down the operation of a gold trading firm called Geneva. This company also operated in Singapore. Some investors had lodge complaints that the company failed to pay the monthly interest or honor the payback guarantee. One investor filed a suit in court in Singapore and the company did not attend court to respond to the complaint. The Commercial Affairs Department also raided this company.

The investors were promised a monthly payout of 2% of their investment and a full refund at the end of one or three months. How is the company able to earn 24% a year, just to pay the "interest" to the investors? They also have to pay for their marketing and administrative expenses. The investors may think that the money is made from "trading in gold".

Trading is not a safe bet, and any trader can make or lose money on trading. Even investing in gold is not a safe bet, as the price of gold may fluctuate and is volatile. If the company is offering a chance for investors to trade in gold, it is a legitimate business. But the company cannot guarantee the interest payout of 2% a month or a 100% refund of the investment.

When the company makes such a guarantee, it is no longer offering a trading scheme. It is now taking a deposit and paying out a guaranteed rate of interest. This activity becomes "deposit taking". There is a law, in perhaps all countries, that companies that takes deposits should get a licence from the authority. These companies will be closely supervised to ensure that they have sufficient funds to meet their obligations. The law is strict on how the money collected should be invested and be kept accountable.

When a company collects deposits and is not regulated, there is a risk that they can siphon off the money outside of the country and close the company down causing the investors to lose all of their invested sums.

The company will be able to pay the monthly interest and capital refund, if they continue to collect money from new investors to pay off the old investors. So long as the inflow is bigger than the outflow, the operation can continue. But the obligation of the company will continue to grow exponentially. This is, in essence, a Ponzi scheme. See http://en.wikipedia.org/wiki/Ponzi_scheme

The authorities in Malaysia and Singapore faced a dilemma. Should they close their eyes and allow the company to expand their operations? Should they step in  and investigate if the company has sufficient funds to meet their obligations? Should they charge the company for collecting deposits without getting a licence?

It is necessary for the authority to act. They should have done so earlier, when the money involved was still quite small. Now, it has grown to be quite a large sum, involving many investors. If nothing is done now, it could become even bigger.

How to avoid investment scams

Read these ten tips from Seah Chiang Nee.
http://thestar.com.my/news/story.asp?file=/2012/10/4/focus/12121017&sec=focus

Apprenticeship system in Germany

I like the apprenticeship system adopted in Germany. It ensures that young workers develop the skills for their job and reduces job hopping.

This system can also be the solution to find a new job for older workers who have been unemployed. They can join an apprenticeship scheme and have part of the training cost and allowance funded by the Government. This is a modification of the current system adopted by the Government.

Here is the article in Wikipedia
http://en.wikipedia.org/wiki/Apprenticeship

Here is an extract on the apprenticeship system adopted in Germany

Germany

In Germany, there are 342 recognized trades (Ausbildungsberufe) where an apprenticeship can be completed. They include for example doctor's assistant, banker, dispensing optician, plumber or oven builder. The dual system means that apprentices spend about 50-70% of their time in companies and the rest in formal education. Depending on the profession, they may work for three to four days a week in the company and then spend one or two days at a vocational school (Berufsschule). This is usually the case for trade and craftspeople. For other professions, usually which require more theoretical learning, the working and school times take place blockwise e.g. in a 12–18 weeks interval. These Berufsschulen have been part of the education system since the 19th century.Apprenticeships are part of Germany's dual education system, and as such form an integral part of many people's working life. Finding employment without having completed an apprenticeship is almost impossible. For some particular technical university professions, such as food technology, a completed apprenticeship is often recommended; for some, such as marine engineering it may even be mandatory.

In 2001, two thirds of young people aged under 22 began an apprenticeship, and 78% of them completed it, meaning that approximately 51% of all young people under 22 have completed an apprenticeship. One in three companies offered apprenticeships in 2003,in 2004 the government signed a pledge with industrial unions that all companies except very small ones must take on apprentices.

The latent decrease of the German population due to low birth rates is now causing a lack of young people available to start an apprenticeship.

[edit]Apprenticeship after general education

After graduation from school at the age of fifteen to nineteen (depending on type of school), students start an apprenticeship in their chosen professions. Realschule and Gymnasium graduates usually have better chances for being accepted as an apprentice for sophisticated craft professions or apprenticeships in white-collar jobs in finance or administration. An apprenticeship takes between 2.5 and 3.5 years. Originally, at the beginning of the 20th century, less than 1% of German students attended the Gymnasium (the 8-9 year university-preparatory school) to obtain the Abitur graduation which was the only way to university back then. In the 1950 still only 5% of German youngsters entered university and in 1960 only 6% did. Due to the risen social wealth and the increased demand for academic professionals in Germany, about 24% of the youngsters entered college/university in 2000.Of those, who did not enter university many started an apprenticeship. The apprenticeships usually end a person's education by age 18-20, but also older apprentices are accepted by the employers under certain conditions. This is frequently the case for immigrants from countries without a compatible professional training system
.

Finding a job

Here are five reasons why an older worker finds it difficult to get a job offer. Young people should be aware of these reasons, and avoid falling into this state. Article

Here is a summary of the reasons:
1. Job hopping
2. Outdated skills
3. Getting fired previously
4. Age (above 40)
5. Unemployed for more than 6 months.

Global Crisis

The global crisis will last for a decade, according to the IMF.
http://www.todayonline.com/Business/EDC121004-0000051/Crisis-will-last-a-decade--IMF-chief-economist

High dividend stocks

During uncertain times, investors are choosing high dividend stocks.
http://www.cnbc.com//id/49275410

For a list of high dividend stocks in Singapore, go to www.fisca.sg (Information) and search for "dividends".

Addressing the key issues

Here are some key issues to be addressed in the National Conversation
http://singaporemind.blogspot.sg/2012/10/national-conversation-goes-on-in.html

Offer fair terms for renewal of motor insurance

30 September 2012 

Editor

Forum Page

Straits Times

Many consumers have consulted me on problems similar to those

experienced by Mr. Tan Yaw Cher (ST 29 Sep, "Don't let insurers

leave car owners with renewal fix")

Like Mr. Tan, they had encountered a bad accident after driving 

carefully for many years, and had their renewal premiums jacked up

a few times, or worse, being rejected for renewal. 

Most other insurance companies will also decline to provide the

insurance, and for the few that do, the terms are usually very stiff.

Consumers in this dire straits have no choice but to accept the 

stiff terms, as motor insurance is compulsory. They do not have 

the luxury of time to shop around. It is like being held to a ransom.

I urge the regulator, namely the Monetary Authority of Singapore, 

to get insurance companies to introduce fair terms for renewal of

motor insurance. Here are my suggested guidelines:

1. If the existing policy has a No Claim Discount of 30% or higher, the

renewal must be offered with no loading

2. If the No Claim Discount is less than 30%, the renewal must be offered

at a loading of not more than 30%. 

3. The loading can be increased to 60%, if there are more than one

accident in a year

4. If the insurer wishes to impose a loading, the consumer must be 

given at least three months notice to look for another insurer.

Tan Kin Lian

President
Financial Services Consumer Association

Letter published in Straits Times:
http://www.straitstimes.com/premium/forum-letters/story/4-ways-fairer-renewals-20121004

Interest rate on installment plan

Do you know what is the interest rate charged to you on an installment plan for consumer goods, e.g. a laptop or television? This articles shows how to calculate the effective interest rate, and also indicates the interest rate charged by a large household appliance store.
http://tankinlian.com/admin/file.aspx?id=683&IID=687

Invest in STI ETF

I have advised consumers to invest in the STI ETF. This is an index fund that is invested in the top 30 shares in Singapore. It is well diversified and is relatively safe for long term investors. It should give an attractive yield compared to bonds and term deposits.

Currently, MAS regulations do not allow ordinary investors to invest in ETF, as it is classified as a complex products. Investors in this ETF has to be knowledgeable and to pass a test. Most investors find this requirement to be a big hurdle and hassle.

There was an announcement earlier that MAS would reclassify the STI ETF to remove the need to pass the test. There seem to be a delay in this re-classification. Investors have to wait a while longer.

As an alternative, investors can invest in the high yielding blue chip shares, such as Singapore Press Holdings, Singapore Telecoms and Starhub or other blue chips that offer a yield that is better than 3%. Do invest in as many shares as possible, to enjoy the benefit of diversification. More details can be found here:

http://tankinlian.com/admin/file.aspx?id=685&IID=689

Motor insurance premium keeps increasing

Have you wondered why motor insurance premiums keep increasing at a high rate each year. Here is one possible reason:
http://tankinlian.com/Admin/File.aspx?ID=656&Frame=1

CAD probes troubled gold trader Genneva

Its Orchard Tower offices were raided by CAD yesterday.

A number of employees were taken in for questioning.

The police has confirmed that investigations are ongoing.

Police raid:

Genneva lawyer says that the company is conducting its own internal investigation

and has appointed forensic accountants. - PHOTO: ARTHUR LEE

http://www.businesstimes.com.sg/premium/top-stories/cad-probes-troubled-gold-trader-genneva-20121002

Gold trading firm raided by government agencies

Hi Mr Tan

Think blood will be spilled... families will be destroyed... lives may be lost...

no coverage in spore news though

 

http://www.themalaysianinsider.com/malaysia/article/gold-trading-firm-raided-by-five-agencies

http://biz.thestar.com.my/news/story.asp?file=/2012/10/1/business/20121001171542&sec=business

US Election Campaign

The message from the Republican Party and its candidate are not appealing to voters, according to this Professor.
http://www.cnbc.com//id/49240341

US Fiscal Cliff

The tax hike is looming for Americans, unless Congress acts to continue the tax breaks.
http://money.cnn.com/2012/10/01/pf/taxes/fiscal-cliff-tax/index.html?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Bleak forecast for ultra books

The ultrabooks are not doing as well as earlier projected.

http://money.cnn.com/2012/10/01/technology/ultrabook-sales-forecast/index.html?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Right to start a newspaper

The Malaysian court has ruled that an online website should be given a licence to start a newspaper - against the stand of the Malaysian government. 

http://www.tremeritus.com/2012/10/02/malaysiakini-wins-right-to-start-newspaper/

New CEO of SMRT

It is encouraging to see the new CEO of SMRT, Desmond Kuek, take the train to work on his first day. He has also arranged to see the maintenance of the track at night. I wish him all the best.
http://www.todayonline.com/Singapore/EDC121002-0000017/New-SMRT-chief-takes-train-on-first-day-of-work

My experience with Mobile Phones

I have been using the Motorola Android phone for two years. Later, I moved to the Samsung Note for two months. I am now using the Windows Phone 7 from LG. I bought it for development of mobile games two years ago.

I find the Windows Phone to be better than the Motorola in several aspects. It is fast to respond and the software is excellent.  I am surprised that the Windows Phone 7 did not sell well, in spite of its excellent features. I hope that Windows Phone 8 will do much better.

How much should you pay for your home?

Here are the tips given by Mr. Tan in his talk on financial planning.
http://tankinlian.com/admin/file.aspx?id=686&IID=690

National Conversation - another angle

Alex Au presents another angle to the National Conversation. His article is worth reading.
http://yawningbread.wordpress.com/2012/09/30/in-the-national-conversation-some-kinds-of-talk-dont-come-cheap/

Follow orders

A friend asked me, "What are your views about the Ng Boon Gay's case. It is now quite confusing and does not seem to be a corruption case. Why is Ng being charged on this score? The matter is getting to be quite ridiculous."

I replied that this is typical of the Singapore system. No one wants to take the responsibility to make a judgment on the merits of the issue. They just follow orders or interpret the book strictly.

Speak out for consumers

Mr KL Tan, 

Reading your 'Property Preview' in today's TST FORUM, I felt compelled to join your Facebook because I share sentiments akin to yours to highlight any injustices or unfair treatments that are existing & ongoing targeting towards innocent good consumers who don't, can't or unable to rebut the culprits. In fact, frankly speaking, Singapore services in general is getting from worse to worst unless voices like you dare to speak out without fear or favor.

Daniel Oon

High motor insurance premium

I send this e-mail to MAS

Please pass this e-mail to your colleague in charge of the insurance department.

The UK office of fair trading has asked the competition commission to study the issue of 

the charges for motor repairs made by third party insurers.

http://www.bbc.co.uk/news/business-19755037

A similar situation applies in Singapore. The overcharging is quite serious and has caused

the motor insurance premium to be much higher than it should be. 

The difference in Singapore is much larger than reported in the UK.

I will be quite happy to elaborate, if someone in MAS is interested to 

take up this matter.