Nov 7, 2007
MAS warns consumers against
unregulated firms
Straits Times Online, The
(Singapore)
Money
November 7, 2007, 9.13pm
Author: Lorna Tan, Finance Correspondent
SCAM artists and get-rich-quick hucksters have come under attack
from two fronts this week.
The Monetary Authority of Singapore (MAS) has warned people against
making investments with unregulated firms and individuals.
And a new consumer alert has also been issued to inform consumers
about get-rich schemes that sound too good to be true.
The warnings come after recent reports about multi-level marketing (MLM) firm Sunshine Empire and
its controversial business practices.
The MAS placed Sunshine on its September's investor alert list,
which means it is not allowed to conduct regulated
activities.
On Oct 24, The Straits Times reported that the MLM firm had come
under scrutiny because it appeared to be operating like a pure
investment scheme, something it did not have the licence to
do.
'The MAS aims to safeguard the interests of investors by
authorising competent and professional persons to provide financial
services. If investors choose to deal with persons who are not
regulated by the MAS, they forgo the protection afforded under laws
administered by the MAS,' an MAS spokesman said. MoneySENSE, a
national financial literacy programme, has issued a new consumer
alert to caution consumers against pie-in-the-sky investment
schemes.
Titled 'If something is too good to be true, it probably is!', the
alert cited Ponzi-style schemes as examples of quick-rich return
proposals that consumers should steer clear of.
Ponzi schemes are scams where people are
enticed to invest by the promise of high returns. The returns,
however, are paid out of funds from new investors entering the
scheme.
It all goes swimmingly until the flow of new funds start to dry
up.
The alert can be found on the MoneySENSE
website.
