Nov 7, 2007
MAS warns consumers against unregulated firms Straits Times Online, The (Singapore)
Money
November 7, 2007, 9.13pm
Author: Lorna Tan, Finance CorrespondentSCAM 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.