Scams Are Getting Around The System
In Singapore, many consumers have the impression that products sold here are safe due to the strict regulations. However, contrary to popular belief, not all regulations are stringent. Ironically, scammers have made use of this thinking to con others.
Take the example of landbanking. In the UK, landbanking is considered as a form of Collective Investment Scheme (CIS) and the relevant administrative and legal setup is necessary to continue sale to the public. However, no landbanking company has done that and landbanking per se is not allowed. It makes one wonder why would a legitimate business avoid the regulations. The situation here is different. Landbanking activities are not regulated and roadshows and advertisements are a common sight. Sadly, UK media reports about how landbanking companies have been having a field day in Singapore when their activities are banned in the UK have surfaced. Recently, one prominent firm have been placed under the MAS Investor’s Alert List.
Another scam, this time focusing on gold have also went under the radar. This scam sells you gold with a high mark-up, as high as 20%, and promises to give you a periodic payout and buy back the gold at the initial transaction price. Again, there is no legislation to regulate. I stand to be corrected, but it seems that the investment regulations in Singapore do not cover physical assets, eg, land, gold. And kudos to the scammers, they seemed to have realized this and are now proactively emphasizing that they are not offering an ‘investment’ but offering a ‘product’ to further ‘protect’ themselves from the authorities.
Scammers are always ahead of the authorities, that this why new legislation always comes after something blows up. At the end of the day, investors have to remember the age old axiom – if it sounds too good to be true, it probably is.