Friday, October 31, 2008

Investors got the Blues - PhotoHunt

PhotoHunt theme : Blue

A lowly-educated cousin was misled into putting her life-savings into a high-risk financial product. She is in her fifties, a blue-collar worker, does not understand English. She holds 2 jobs, scrimped and saved for 30 years to accumulate S$100,000.

Her money was initially placed in a Fixed Deposit but a Relationship Manager sold her the high-risk financial product, promising her higher returns but did not mention about the risks involved.

My cousin was asked to put her signature on blank forms and the Relationship Manager filled in her particulars and answered the questions on the Fact Finding/Analysis Sheet on her behalf. Yes, she is too naive stupid.

But this is Singapore. The ordinary citizens trust that the authorities have stringent controls and regulations in place. Who would expect such things to happen?

The redemption value of that product has been calculated to be zero. The news came as a bolt from the blue.

I was with my cousin for the closed door DBS Dialogue Session on the failed financial product, High Notes 5. All the investors were angry and many elderly ladies were in tears.

Aggrieved investors remain dissatisfied with DBS despite being informed that those who have invested up to S$100,000 (as opposed to the current limit of S$50,000) can take their case to the Financial Industry Disputes Resolution Centre (FIDReC).

Rajan Raju, Managing Director and Head of Consumer Banking at DBS Bank and the bank's independent external adviser, Gerald Ee, met the investors.

My cousin was given an investor complaint form, which establishes among other things if there was mis-selling, to fill. DBS will review it on a case-by-case basis.

DBS Bank has said it will review every High Notes 5 case, and its investor will know the outcome of the resolution process by the end of the year.

Legal advice was against pursuing a class action suit. It’s an uphill task to prove mis-selling in a court of law. It’s our word against the Relationship Manager’s.

Who are responsible?

After the dialogue session, I met several investors from Malaysia, China, Taiwan and Korea. These days, I have been helping my cousin's elderly, uneducated colleagues and neighbours who have invested in such high-risk financial products to write complaints.

I get the blues seeing the elderly not being able to eat and sleep over the loss of their life-savings. Some have fallen ill. I hope there would not be suicides.

I hope more educated people could come out to help these vulnerable investors. Just help them to fill in their investor complaint forms in English or Chinese. There will be a meeting for investors at :

Saturday 1 November 2008
Time: 5 - 7 pm
Nearest MRT station: Clarke Quay (NE Line)


  1. I, too, can't believe this can happen, what's more it's DBS, and in SG somemore! I know it's a long shot, but I wish the under-informed investors will get a fair deal out of this.

  2. ya..nowadays people just invest blindly... :(

  3. Horsoon,
    Yes... it's so embarrassing. It's Asia's largest bank and the Singapore Government is well-known for its strict regulations. sigh.

    I listened to a couple of Chinese speaking investors from Malaysia. They came all the way from KL to attend the dialogue session. There were Indonesian investors too. All are worried. Their life-savings are wiped out.

  4. Leonard,
    Investors have to do their own homework too... but to have bank staff harassing depositors to buy financial products, that's another thing.

  5. OMG! This is simply unbelievable.

    DBS sommo!!!

    Plus the fact that in the recent past there have been a few notable scams in Singapore and yet....

    I hope that these elderly victims will find recompense somehow. Poor thangs. If it happened to me I'd probably have died from cardiac arrest.

  6. This comment has been removed by the author.

  7. I kind of saw that coming since around 2004 when bank are trying to push some product over the counter promising high returns whenever one do some transaction. I was very much put off because the bank officer look at the amount of the personal bank book to qualify you and then advice you to invest in their latest product. That itself already cross my privacy.

    If people want to do investment, he/she should go and paid a broker. How much the bank officer being paid and are they really qualify other than what they know come from the brochures?

    Can you imagine how many non-financial savvy uncle and auntie who had some hard earning saving buy in with such a deal without knowing any risk. From the track record of local bank, good marketing materials, FREEBIES and fervent bank officers of the product, how easy can one not resist? One will only know if they were there doing the transaction.

    Half of the time, the bank are NOT selling their own product but most of the time people had an impression is their product without knowing the bank only facilitate the transaction of the timely amount.

    Sorry ECL of the long post and rant.:P

  8. If you are a high-risk investor, you know how to play the game. I think it is a crime (which should be punished!!) not to properly inform the ones who innocently trust the bank/the bank officer. There should be more control and a new financial order to avoid these sad things happening, specially to the elderly who have no time to recover losses... It makes me very angry.
    Sorry about that.
    Hope you enjoy your weekend, ECL!

  9. most people trust banks and their employees, which may result in problems should they be unscrupolous to hoodwink a customer.

    For non-financial savvy people, they rely on the banks' staff to provide good, accurate and unbiased opinions which sadly is not the case here.

    Here, these so-called financial consultants (fresh-grad, looking to meet the monthly quota)pushed for products that may not be beneficial for customers but of course beneficial for the bank and pay the staff handsome comission.

    Imagine to see your hard earned money wiped out just like that!

  10. ECL, I wouldn't say its lowly educated. I have a degree and I was with my mother and sister and yet we still got mis----lead. We were looking for FD and the bank sales sold us the financial product telling us its principle protected plus higher interest. It works exactly like FD, and so we thought. He did not touch on anything about the risk and the possibility of losing everything.

    Mind you, we were looking for FD with very very very very ...(do I need to elaborate further) low risk and he sold us a product with very high risk. And in the process even say in Mandarin to my mother, '保本,' without elaborating the underlying clauses to that. Now I'm in the process of 'fighting' over with the bank too.

  11. By the way, I think there was a news report yesterday saying that FIDRec has increased the limit to $100K already? Correct me if I am wrong.

  12. Thanks for highlighting this issue. The only good thing that would come out of this fiasco is that people would think twice before pouring their hard earned money into dubious financial products that promised higher returns without fully understanding the risk.

    S'pore Govt is clearly pro-business and pushing the onus to the banks to review issues on a 'case by case' basis. Regardless of what the banks say, it's highly likely that the compensation, if any, would be minuscule.

  13. I'm glad my mother was stubborn as an ox and vehemently refused to invest any of her money into such bonds, stocks and stuffs. If not, she'll be one of those ladies in tears now. Damn, even banks can't be trusted nowadays!!

  14. Since 1999 we were encouraged to enter a life annuity scheme as a cover for diminising state pension, n the govt made it more attractive by allowing us to deduct via income tax to a max tune of 12,000 euro p/yr. All the banks were in for the lucrative commission which policy holders were unaware of. 30% per annum !! The policies were coupled with share prices n this further depressed the policies further downwards. Our input has been halved after 1 yr. Putting the money in a savings account would hv yield more but it's too late to do anything now. We can only hope that it would be worth a bit more when we retire at 65. I will never again burn my fingers with products involving stocks n shares or the mountain of gold promised by the relationship managers !

  15. the fool on the hill,
    To me, it's incredible. I'm embarrassed when foreigners who invested in these banks' financial products are misled. Some Indonesians and Malaysians don't understand English.

    Young people want to be millionaires by the age of 30. To make huge profits, organisations come up with many money spinning products or ideas.

    The common folks are easy targets, many got sucked into it.

    I hope MAS will learn something from this.

    More problems are going to surface come January next year.

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  17. LEon,
    Thanks for sharing your views.

    I too am often approached by bank tellers whenever I deposit money. I detest it very much.

    I didn't think the bank staff would actively target vulnerable depositors. Hearing stories of how the elderly were misled into buying the inappropriate financial products, they are really unscrupulous when it comes to meeting quotas or earning commission.

    Several complaints were published in the papers. Why didn't MAS act?

  18. Mar,
    High risk investors have the means and knowledge to play this game, they are used to huge profits and losses.

    For the ordinary folks they are happy to just have enough savings for their old age. They cannot afford to lose what they have accumulated over the years.

    Didn't the bank staff understand the elderly/ retired folks have lesser chance to start saving all over again? I sympathise with these unfortunate group.

  19. Lina,
    Yes, very sad. What is this world coming to?

    To make more money, some people have lost their basic values and would do anything, even robbing the old and vulnerable.

    Those folks who lost most or all of their savings cannot sleep and eat. They are worried and depressed. Some are suicidal.

    Can those who benefited from these poor folks sleep well at night?

  20. Symphony of Love,
    I have financial savvy friends who were hit as well. They have seen lawyers but were advised against legal action. It's difficult to prove but it is still worth a try.

    There were signs that the financial markets were headed towards a collapse. Nobody expected this financial tsunami to happen.

    I only have sympathy for those who have lost their money. I told my cousins and those whom I help to fill in their investor complaint forms, learn your lesson and move on. I doubt they will get 100% refund nor even full compensation.

    Every one learns a lesson here. And many Singaporeans are never going to forget it.

  21. Symphony of Love,
    FIDRec has increased the limit to $100K.

  22. CK,
    My exact sentiments.

    Speaking to many insider people, the chances of investors winning is very low. But the investors are entitled to their choice.

    I have gone through several contracts of the people who asked for my help, I advise them to accept what their banks offered. It's better than nothing.

    David and Goliath.
    Egg against rock.
    'Nobody' will be left out. :)

  23. Pu Niao,
    It's better not to 'touch' anything that you are not familiar.

    I learnt my lesson the hard way too.

    Your Mom is wise and also not 'light-ear' (easily influenced).

    Hope a lesson is learnt from this and that those who got burnt don't repeat the history again.

  24. How can a bank do this? In thought this kind of thing don't happen in Singapore! It's not like it's promoted by some underground illegal company. Really feel sorry for those who invested in it.

  25. Dutchie,
    30% commission per annum!! Wow!

    It happens in another country too huh. It just shows that not everyone will make money when investing money. There are risks. Nothing can be guaranteed.

    I shouldn't take life too seriously now. Who knows what will happen next? :P

  26. foongpc,
    That's the thought that went through every one's mind when the stories are told. :)

    Singapore has become a good brand name over the years, but because of some rotten apples, it is sinking. It is sad.

  27. eastcoastlife, hopefully it may bring some light and cheers as I attempt to share good luck with you and your readers here! Hope there will be more good-will in this world, so that it won't get too blue.

  28. This happens all over the world, and it's always wrong to take advantage of others for your own gain. Whether it's financial, or just those who try to manipulate and control--it's always wrong. So sorry for your relative, and all of those persons take advantage of by vultures.

  29. ECL,
    Hmm... that's bad. I hope everyone would learn from this...

  30. oceanskies,
    Thank you, dear!
    You're so lucky! Two prizes, 2 different concerts!

  31. Gran,
    So sad.... but it's a fact of life. The fittest survives.

    I have to train my son and prepare him for the sh*t that lies ahead. I hope he can learn from my experiences and not be so gullible.

  32. It is a very sad story. I am so sorry that things like this happen. Hoping for a better outcome...

  33. Annie,
    I'm hoping for better outcome too, but it is not coming. Sad.

  34. This is very sad :( Our elderly people should be taken care of and not have to worry or be left with nothing.

  35. Sue,
    In Singapore, the elderly are left to fend for themselves. We have to plan and save up when we are young for our retirement years. If we spend all our money when we are young, we will be in big trouble. :P

    Our Government doesn't believe in welfare systems.

  36. ECL,
    Come to think of it, it's just human nature to want more! Greed is what I'm talking about. If human is not greedy, they wouldn't fall into such trap. What do you think?

  37. Kok,
    Cannot say like that lah! Greed!? You sound like our SM. :)

    Although Greed means the desire to have more than necessary. It doesn't apply to the poor retirees or even some of the investors here.

    Who wouldn't want more money, to earn more interest on your capital or investment?

    Some people were misled into buying the wrong product. These are high risk financial products which even experts have difficulty explaining. How do these vulnerable know the risk then? There was intent to withhold information and facts when selling these toxic products.

    My relatives are definitely not greedy. They are law-abiding citizens who work very hard to raise their families, contribute to the economy of Singapore and the huge salaries of our leaders.

  38. wah.. this is so sad.. poor thing lah your cousin..i agree with the sentiment.. DBS some more..


  39. Ladyjava,
    I hope they will look into my relatives' cases. There are now 3 of them. ish.

  40. That is so sad. I hope something can be done about it. That makes me blue thinking about that happening to people, especially older ones.

  41. That is disgraceful behaviour on the part of the seller. I hope they get their just desserts some day

  42. ECL,this is SO sad, to think these people have saved their money only to be sucked into these investments by moneyed banks?

    I hope everything will be settled soon and that relationship Manager should be ****** for not disclosing the truth about the risks.

  43. this post makes me feel angry and sad. reminds me of the film money not enough 2. this is money ..coffin money literally speaking. :(

  44. A lot of people had what they considered, and even reasonably should be considered good investments, and now with the bad market many are losing heir savings. It is a tragedy. My heart is with all of those who have lost on this depression. Many could not afford to lose!

  45. There are many similar cases here too. It is tough time now. Let's hope that everything will be back on the right track in no time.

  46. A lot of those bank people portray themselves as knowledge and expert. They prey on people who are full of trust, not just greed. So very sad -- and yes, such goings on make me blue. BTW, heard that the Royal Bank of Scotland's going to pay its employees bonuses despite needing government help? All those banks that have been involved with these stupid deals should be forbidden to give employees, especially those 'top tier' ones, any bonuses this year and for some time to come.

  47. That's so sad. I feel sorry for the investors. The risk of investments have become high. I hope they can still recover their hard earned money.

  48. Carver,
    Oh no! People get the blues reading this post. It is sad for the elderly when their life-savings are wiped out. Their future is bleak, especially here in Singapore when they cannot get much welfare care and support from our Government.

  49. jams,
    Bank staff should be adequately trained and there are risk analysis forms to fill but they chose to hide certain things from investors.

  50. julie,
    I just read an article written by a lawyer regarding taking a class action against mis-selling. The banks protected themselves very well. Difficult case to fight. The banks can pay for the best lawyer. They cannot lose or else they will lose everything.

    The investors will be the largest losers. :(

  51. Bengbeng,
    Very sad, it is coffin money to some of the elderly investors. Now they are worried they can't even afford a coffin upon their death. sigh.

  52. Diane,
    Right. If the market didn't take a turn for the worse, these people would have made money. It's bad timing and plain bad luck.

    No matter how well we plan, we can never beat the will of God.

  53. Doreen,
    It's happening in NZ too? Oh.

    Hope this financial crisis is not going to last too long.

  54. YTSL,
    The bank staff are supposed to be good in their products. Scary that they sell products that they weren't familiar with. Customers are supposed to read up and research on the risks.

    If lowly educated customers want to buy, they should be properly advised, not hard sell to them. The relationship manager should be able to tell if they are suitable for these products.

  55. Heart of Rachel,
    In every investment, there is a risk. If we go in knowing the risks, we deserve to lose our money.

    Some of these elderly were told repeatedly that the principal is guaranteed and what they bought will not be affected even if the market go down. The RMs are misleading them.

    Their investment in some of the financial products is zero now.

  56. This is the sort of blue I didn't expect to get from you. I thought you would be in something kinky and blue this week.. haha :P

  57. It is very scary to invest money because we never know what gone happen

    My PH entry this week : in HERE and HERE. Hope you have time to visit . Thanks

  58. wow! that's so sad. some people are really heartless to scam other people's hard-earned money.

    Btw, my PH entry is up.

  59. There are people out there in this world who will do anything for money. It is not even against their conscience, because they have none. I have also lost a lot of money in investments. I am just lucky I am still young and able to earn back the money. Common folks like us need to be careful and never trust anything that promises high returns beyond the norm. Hope these people get back some of their money.

  60. Oh my ECL,
    The same thing is happening here also!! So many people losing everything.

    My daughter's old Professor who chaired the committee for her PHD phoned her 2 weeks ago to say that their bank failed and closed their doors.

    They were both getting ready to retire and still had a mortgage on their home.

    They lost all their money in the bank...still have no clue what is going to happen to their home...and they lost their retirement funds.

    It is definitely a very blue time world wide now for so many.

    I am glad that we are poor already. We don't have a lot of money to life is staying the same for us.

    We are also fortunate that our home is payed for and our debt is low.

    We have been blessed during all of this. I thank God for that. But, my heart goes out to so many who are losing everything!!

    Mine is up here:

    Blessings my dear friend...I shall pray!!:-))

  61. ECL,
    Hah! You got the points there. And yes, I do agree with what you say. thing is, how to prevent such thing to happen leh?

  62. Something sadly unpredictable...but than again, there's always the risk that are unavoidable in the financial sector.
    Currently it's a global affair. This is gonna last at least a while....*gulpz & double gulpz*

  63. Investments are always risky, but it is shameful when there are those who are deceitful and dishonest who would steal someone's lifesavings.

  64. I am so sorry that happened to your cousin. How sad for her to lose her life savings like that.

  65. yes that's too sad hope it will not happened again... Take care and happy weekend...

  66. Shame on those who offers such fraud !

    Wishing you a wonderful end to your week :-)

  67. you summed everything up about the dbs mis-selling issue the best, ECL..

    i read the news from our manistream media,which they talk about the issue with bombastic words and in circles, and i still can't understand a sh*t word they say.

  68. It sounds exactly the same what we have here ! Now "little" shareholders or people for "safe" investments took lawyers and filed the bank. Probably with no result. It's a shame !!

  69. Wah ECL has been busy helping ppl, as usual! Good for u woman and I hope ur cousin will pull through this alright. HUGS! :):):)

  70. 100,000 is a lot man!! Heartpain la wei!! :(

  71. there's a heavy price to pay when things go awry. thanks for the eye-opening article.

  72. There have been financial problems the world over.

  73. Pardon me ECL,

    I dunno where else to place this, so I enter it at this Commentary.

    You've been TAGGED at


  74. Yes, I think people are feeling blue all over the world. I know I am.

  75. hi, I have an award and a tag for you. Pls visit my blog here

  76. that's a traumatic experience. one should really know where he/she is investing. and it's quite healthy to invest on different things and not only on one thing.

  77. many hapless victims suffer from the greediness of a handful... i hope the singapore government and the company itself will deal with erring "financial experts" appropriately...

    hoping for a better week ahead-

  78. That is so sad. I just hope those investors will get back their hard earned money. Or never? Who knows! I hope your government will take all the necessary actions..Nice entry and very thoughtful stuff as usual! :D Sorry I was late..Been busy with real life stuff :D

  79. That's a lot of money. Let's just all hope that the government will be able to help the victims.

  80. Good post ECL. It is a tragedy when the most vulnerable people are mislead. I do hope that something can be done to help them. Have a good week and thanks for visiting.