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Today, I received the monthly statement from the financial institution that I bought my Minibonds from.
Right at the very bottom of the page was the following disclaimer which I don’t recall seeing before:
“Please be reminded that where you have failed or refused or deemed to have failed or refused to provide us with any information or answers as requested then you will also be taken as having acknowledged (and we will be regarding and materially relying on you having acknowledged) that we cannot identify with any certainty your financial objectives, financial circumstances and particular needs and therefore you agree that any advice or recommendation provided in respect to your account with us by any of ourselves, our duly authorised representatives or officers shall be treated at best only as general advice or recommendation and it is acknowledged and agreed that such advice does not take into account and may not be suitable for your investment objectives, financial situation and particular needs.”
A cover-ass statement if I’ve ever seen one. Somehow, I don’t think this was what MAS had in mind when undertaking the review of the marketing and sale of structured products…
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Question : Why is Paul Nah, Senior VP & Head DBS Franchise & Strategy Consumer Banking, started a stare & want-to-fight incident with a small time investor?
Answer: Paul Nah lost big time in Minibond. His boss did the same to him so he is just passing on…..
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MAS has referred all complaints to the FIs…just look at what some of them has done…
Staring incident with DBS
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I am surprised that such an incident could happened. Perhaps a police report should be made.
Anyway, when bad things happened, everybody wants to cover themselves and thus pushing blame, finger-pointing, denying etc are inevitable.
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several yrs back when my mom FD was due for renewal, I happened to be on leave and was with her at a local bank. The counter staff has told her to take a seat and someone will be talking to her.
She was given a private room and attended specially by a staff and I was getting a bit worried what is taking her so long .. when i came from my short errands…
I told the staff not to waste her breath on my mother ( 80 yrs old) as i will not allow her to buy any other products apart from placing it in FD. From then onwards, I opened a joint name with her and for the past 5 yrs I have been renewing her FD dutifully without her being harrassed by any RMs.
Even for me whenever the RM sees my renewal, they will say ” can I get someone to talk to u, just 5 mins only” and I have rejected most of the occasions as I said I just want FD. But on some occasions I tried to see what are they trying to sell and lo and behold, I find many times, these young RMs do not fully understand their products and often times and they are selling based on the 1 sheet flyer only. I will ask for the term sheets or fact sheets and often times, these are not available.
So, I will tell them since all details are not available, I will have to renew my FD today….You have to be very firmed to tell these RMs off cos they are really like vultures hawking on ignorant customers. So it is not surprising that many got conned into buying their products.
I’m thankful that I’m financially trained and also often times I do my banking errands during my lunch hrs, so I dont have much time for the RMs to sweet talk me…. but unfortunately those retirees , uncles n aunties have the whole world time to sit and listen and sip coffee in their Priviledge lounge, hence it is easier to be “sold”….
For the many of us who have old parents, pls help to take care of their financial wealth ( if they trust you ).
ReplyHi Lyn,
Your experience is commonly faced by almost everybody who walks into any bank.
Just when the teller sees you have a few extra dollars in your bank a/c, she would ask if you are interested in a new product which gives a much higher interest rate and another bank staff would talk to you, not taking more than 5 or 10 min.
Once you sit down, you would be bombarded until so tired that either you have signed on the dotted line or very firmed, before you get to leave that comfortable seat.
I hate these extra services.
4 questions:
1. Why must MAS openly declare it can’t make banks pay compensation? Of course it can, it can simply threaten to suspend the bank. That is what the HKMA said to the banks – if they are guilty of misselling action will be taken against them.
2. Why MAS cannot conduct its own investigation and must ask the bank to investigate themselves?
3. Is there no law against misselling in Singapore? So long as the banks can legally cover themselves with a prospectus, they can sell toilet paper?
4. Based on what a few of the RMs wrote in ST Forum and Today, there was strong incentive and pressure to missell. If misselling is an offense on the part of the banks is there no interest to pursue the guilty party by the authorities?
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1) This is from MAS FAQ:
https://secure.mas.gov.sg/apps/go/index.jsp?app=ifaq
When should I report a matter to MAS?
MAS’ role is to ensure that financial institutions licensed by MAS conduct their business prudently and in accordance with rules and regulations issued by MAS. MAS is unable to resolve commercial disputes between you and your financial institution, or order the financial institution to pay compensation to you. To resolve a problem with your financial institution, please refer to questions 6 to 8 above or the “Getting It Right: How To Resolve A Problem With Your Financial Institution” consumer guide.
MAS is, however, interested in matters that may raise issues of supervisory concern. You can report a matter to MAS if you suspect a financial institution has violated MAS’ rules and regulations. MAS will follow-up with the financial institution if there are matters of supervisory concerns, and take regulatory action against financial institutions that have breached MAS’ rules and regulations. However, MAS cannot keep you informed of its confidential supervisory dealings with specific financial institutions. MAS also cannot intervene in matters relating to service standards, commercial decisions such as pricing policies of financial institutions, contractual arrangements and civil disputes; give legal advice or comment on cases that have been heard in court or are pending legal action; nor order financial institutions to compensate you.
In other words, their powers are limited according to the rulebook. Of course, there is nothing to stop our leaders from stepping up and making executive decisions that go beyond MAS’s rulebook.
2) MAS statement:
If there is evidence of potential breaches of our laws or regulations, MAS and the relevant authorities will investigate and take appropriate action.
Which means they will investigate only if there is evidence. What constitutes evidence then? Surely you have to investigate first before you can uncover the evidence?
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This whole “mis-selling” episode should be taken differently by MAS. Not by standard procedure anymore!! Why? It involves many people and money. I applauded the prompt response by HK Financial secretary in this episode. It requires an appropriate authority to make “out of norm” response or decision before other statutory boards can react accordingly.
In the first place, I don’t agree MAS directive to let FIs appoint their own “independent party” to investigate complaints. To me, it’s just providing FIs with an avenue to prepare “counter-answers” to these details of complaints more readily. Individual investors will not have such resources to do such thing.
To be fair, details of complaints should be launched direct to an MAS appointed independent party. After compilation of these complain details, FIs should then be called up to answer the accusation. If FIs has not violated anything, they should be able to answer readily. This is what I call FAIR trial.
As a son, it breaks my heart to find my mom crying one day when I got home from work. My mom said that DBS bank called her to tell her that her High Note 5 investments is probably wiped out. My mom trusted the RM that sold her the product and they told her it is very safe like a fixed deposit with higher return.
I went to DBS bank to get an explanation – they denied misselling the product to my mom, they denied that they failed to explain the risk to my mom. They were in fact calling my mom a liar. Not only did she lose her life savings she had to go to the bank to be accused of being a liar. The bank said it is legally covered by its 100 page prospectus and that my mom has no rights against them.
Singaporeans have no rights. That I have to agree. I felt like sh*t after meeting up with the bank, it was a waste of time. My mom couldn’t possibly have understood the risk of the product they were paddling, she was cheated of her money.
ReplyIt is stories like yours that saddens me.
I do hope that something positive will come out of all our efforts, otherwise it is truly a very sad day for Singaporeans.
For every one person that has come forward, how many more are still in the dark about what has happened?
http://www.martinlee.sg/how-to-file-a-dispute-for-structured-product-victims/
ReplyHi # MAS_Banks_one_gangon,
It’s sad but your mum probably need your support to pull this through. I am one of the victim and can testified your mother is speaking the truth eventhough we were sold by different FIs.
Hong Kong has been updating their situation almost daily and they already conducted 2 protest march.
I believe this mis-sell is wide spread and I believe the FIs also knows about it. They will never admit it given that they will have to pay a big fine and cough out compensation to the investors.
MAS only option is for us to go to FIDRC for mediation and I am very such it will become a deadlock. How to fight the bank when individually we are not able to afford fight with their lawyers and they hid behind the prospectus.
See how things goes but do continue to followup in lioninvestor.com.
On Monday, 7 investors are meeting in MAS at 6 pm after they submit a petition.
All email to SM, PM, MM, MP, GRC will be redirected to MAS.
On Saturday from 5-7 pm, Mr Tan Kian Lian is holding a petition signing to the govt to help.
Please take care of your mum as for myself, the disappointment in not knowing more before signing on the dotted lines is plain torturing sometimes.
Regards,
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Hi MAS_Banks_one_gang
I’m in the same boat too. Mom put almost all her life-savings with Citibank into actual lehman bonds just this march, and now they could be totally gone. My complaint to them might as well be singing a song to them as their whole attitude is almost ‘not my problem, we warned you already,’ which is totally baloney. In anyway, it would be naive for us to think that they are going to readily admit any wrongdoings. I am considering legal action, and is asking ard abt the fee structure, fyi.
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There appears to be a difference between a product being “registered with MAS” and “approved by MAS”. Being APPROVED is a very strong word to use. If I am not wrong, all these products (Minibonds, High Notes etc) are just registerd with MAS, but not approved by MAS.
Registering a product does not mean anything. Anybody can register a financial product with MAS by submitting brochure, flyer, prospectus etc. The product’s integrity is not vetted by MAS. It is the approval that will bind MAS to what is sold in the market. And MAS says that these products are not approved by them. I hope MAS does not use this loophole to escape liability.
FYI, a similar thing is happening in the private school industry. Private schools just need to register with MOE. MOE’s position is that it does not approve the private schools. So we have a number of them misleading students with courses offered, offering fake degrees, closing down in mid-term etc.
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Oh my goodness me! I thought Singapore stood out as a very well regulated country where we have a high amount of trust in our Authorities.
Now it seems that even banks and private schools can get away scot-free with misleading our citizens and maybe with just a fine for the Authorities. As for the citizens misled, well it’s too bad -“such is life”! Buyers beware!
This is educational…thanks!
ReplyJust need some clarification:
From the MAS statement, it seems that the most MAS would do is to fine the Financial Institutions and we do not get a cent from the excercise.
Then what is the purpose of all these appointments and petitions and meet the MP if all they could do is to just fine the FIs?
I don’t see anywhere in the statement that they will help us recoup as much as possible. Or if MAS will find ways to protect our underlying securities to ensure we get the best outcome.
Seems that end of the day only MAS would stand to gain from the fines.
Isn’t our objective to get the misrepresenting culprits to be responsible by helping us get as much back as possible because we have been “conned”?
What is going on? Did I miss out anything?
ReplyBad Dream,
You did not miss anything. Pls see my comments above. I would really like to see the 3 auditors specify a recommended % compensation.
ReplyMAS’s stand is for us to settle it privately with the banks.
They will only come in to fine the FI if there is any wrongdoing.
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TV Program on Minibonds this Sunday 9.30pm :
Money Mind, Channel NewsAsia is featuring a story on the Lehman Minibonds case and what constitutes mis-selling in which they talk to some financial experts for their views. It’ll air this Sunday at 9.30pm – repeated 11.30am Monday.
ReplyThe way I see it, this audit will mainly benefit future investors.
For existings investors, it must benefit us in the flwg manner:- Should the auditors find fault in the selling process, they must recommend a % compensation payout to all investors. MAS must then enforce the FIs to make this payout to investors.
No point in MAS fining the FIs. Only MAS will get richer. Investors get zilche.
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The MAS should come clean with the total amount of money and the number of people involved. Being victims, we are entitled to know the magnitude of the problem.
If the amount runs into multi-millions and the number of people runs into thousands, does MAS really think that a “fine” and a “public reprimand” are enough?
The punishment is not even in direct proportion.
If the ex-NKF chairman could be punished for his actions, the CEOs of these banks should also be made accountable for their decisions.
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I wonder how 1 appointee per bank or bank group will help to unravel the whole mess. Is this tokenism?
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