Insurance scams in Singapore have been a concerning issue over the years, requiring vigilant awareness and preventive measures. These scams often target unsuspecting individuals, promising lucrative returns or benefits that turn out to be fraudulent schemes. From fake insurance policies to unauthorized withdrawals of premiums, perpetrators employ various tactics to deceive victims.
Understanding the common types of insurance scams and staying informed about recent trends are crucial steps in protecting oneself from financial fraud. Let’s delve into some notable instances of insurance scams in Singapore and explore strategies to safeguard against such fraudulent activities.
What Is an Investment / Insurance Scam
A fraudulent investment scheme, also known as an investment scam, presents itself as a lucrative and convincing opportunity, often impersonating legitimate individuals or financial institutions through various channels such as phone calls, emails, online platforms, and postal mail. These fraudulent entities, often referred to as ‘clone firms,’ employ tactics to pressure individuals into making quick investment decisions.
The ongoing COVID-19 pandemic has disrupted businesses across various sectors, including those listed on the stock market. This disruption has contributed to market volatility, which is expected to persist for some time. Unfortunately, such volatile market conditions can create opportunities for fraudsters to exploit unsuspecting individuals, capitalizing on the uncertainty and instability of the situation.
List of Insurance Scams in Singapore
Former Financial Services Manager Jailed for Forgery and Assisting Laundering of S$10,000 Scam Funds
Danny Lim Kok Tiong, a former financial services manager, received a 15-week jail sentence on May 31, 2023, for fraudulent activities related to client accounts and money laundering. He pleaded guilty to forging documents and signatures to transfer accounts to his new employer, Ray Alliance Financial Advisers, after leaving Pana Harrison, his previous workplace. Lim manipulated documents and signatures to keep clients, such as Ms. Lim Chuen Chuen, under his management. He also assisted in money laundering by receiving S$10,000 into his bank account and transferring most of it to another individual. Despite Lim’s lack of previous convictions, the court emphasized the severity of his actions and the need for an appropriate sentence.
Former Insurance Agent Receives Eight-Year Ban for Corruption Offenses in Singapore
The Monetary Authority of Singapore imposed an eight-year prohibition order on James Yeo Siew Liang, a former insurance agent, for corruption offenses, including giving bribes totaling nearly $93,000. Yeo is prohibited from providing financial advisory services or participating in insurance intermediary management. Between March and June 2018, he gave bribes to an Indonesian embassy official to facilitate accreditation for AIG Pacific Insurance and Liberty Insurance to sell performance bonds. Yeo was convicted on April 28, 2021, of 18 counts of corruption, resulting in a 15-month imprisonment and a fine. Corruption convictions in Singapore can lead to imprisonment for up to five years, a fine of up to $100,000, or both.
Former Personal Banker Allegedly Defrauds Customer of $220,000 with Sale of Counterfeit Financial Products
A personal banker was allegedly found guilty of cheating a customer out of $220,000 through the sale of fictitious financial products. The accused, aged 30, lost his job and faced charges of cheating in court. The police were alerted to the case on Dec 27, 2022, after the victim transferred funds into separate bank accounts, deceived by promises of high returns. Investigations suggested the accused might be involved in similar scams. Meanwhile, a 26-year-old man allegedly cheated multiple victims of $3,400 by falsely advertising school bus services. The police advised the public to be cautious, especially when engaging service providers or responding to unsolicited calls from scammers impersonating government officials. They urged installing the ScamShield app to screen dubious calls and warned against sharing banking credentials over the phone.
Former Financial Consultant Confesses to Defrauding 25 Individuals Who Transferred Almost $1.3 Million to Him
Former financial consultant Ong Ka Yong has admitted to cheating 25 individuals who transferred nearly $1.3 million to him. He ran his scheme for over a year from April 2020 until he surrendered himself. Ong, formerly employed at Manulife Financial Advisors and Beyond Consultancy, pleaded guilty to 11 counts of cheating, with 14 additional charges to be considered during sentencing. He approached one of his clients, promising fictitious investment opportunities, and received transfers totaling $5,000 from her on multiple occasions. Despite promising dividends and guaranteed capital, Ong invested the money in forex trading instead.
Ex-Financial Consultant Receives Four-Year Ban in Singapore
Former financial adviser Suzannah Khoo Lee Sun received a four-year prohibition order in Singapore after being found guilty of misappropriating a client’s money for personal use in 2021. The Monetary Authority of Singapore (MAS) issued the order, effective July 02, which bars Khoo from providing financial advisory services, managing financial advisory firms, or working as an insurance intermediary. Khoo, formerly a representative of Prudential Singapore, misused SG$3,735.48 entrusted to her for insurance premiums. She pleaded guilty to criminal breach of trust in November 2020 and was fined SG$9,000. MAS imposed the prohibition order to uphold the integrity of Singapore’s financial sector, citing Khoo’s conviction as evidence of her dishonesty in performing financial advisory services.
MAS Issues Four-Year Ban to Former Broker for Deceptive Practices Regarding Insurance Coverage
The Monetary Authority of Singapore (MAS) issued a four-year ban to Lau Man Chun for dishonest conduct related to the sale of personal accident policies in 2021. Lau, who worked at Financial Alliance Pte Ltd and later at Manulife Financial Advisers, misled clients into believing they were insured, despite no longer having the authority to sell general insurance products. He collected premiums and provided falsified policy documents, leaving clients without coverage. MAS imposed the ban to safeguard against such deceptive practices in the financial advisory industry.
Ex-OCBC Financial Consultant Sentenced to 30 Months in Jail for Defrauding Five Clients of $170,000
An ex-OCBC financial consultant, Hoi Wei Kit, was sentenced to 30 months in jail for defrauding five clients of $170,000. Hoi, 34, manipulated clients who relied on his explanations, persuading them to sign up for financial products without proper scrutiny. He misappropriated their funds to settle his gambling debts. Hoi’s fraudulent activities were discovered when a victim attempted to withdraw her deposit but found no account existed. OCBC promptly reported the matter to the police. Hoi pleaded guilty to seven charges, admitting to cheating five clients of $130,000. He could have faced up to 10 years in jail for each count of cheating.
Singapore Financial Advisor Receives Five-Year Ban for Fraud
The Monetary Authority of Singapore (MAS) issued a five-year prohibition order (PO) against Zeng Xuan, a former representative of Oversea-Chinese Banking Corporation, after she was convicted of fraud and dishonesty in December 2017. The PO, effective Wednesday, barred Zeng from providing financial advisory services and holding management roles or substantial shares in financial advisory firms. Zeng’s misconduct involved lying to a client about waiving additional premiums for insurance policies, forging documents, and making unauthorized changes to application forms. She pleaded guilty and was sentenced to two weeks’ imprisonment. MAS stated that Zeng’s conviction indicated her inability to perform financial advisory services honestly.
MAS Issues Prohibition Orders Against Former GEFA Agents for Tax Evasion Scheme
The Monetary Authority of Singapore (MAS) has issued five-year prohibition orders against six former agents of Great Eastern Financial Advisers (GEFA) for engaging in fraudulent and dishonest conduct related to tax evasion. These individuals, who were part of the same team at GEFA, falsely inflated their business expenses with the help of a third party between April 2018 and April 2019. This resulted in a reduction of their income taxes by S$124,648 (US$92,000) for the 2018 and 2019 assessment years. The convictions led to jail terms ranging from four days to eight weeks and fines between S$7,965 to S$113,829.02 imposed on them in September 2022. MAS took regulatory action following a referral from the Inland Revenue Authority of Singapore, issuing five-year prohibition orders to prevent them from providing financial advisory services or participating in the management of financial advisory firms under the Financial Advisers Act 2001. They are also prohibited from engaging in insurance intermediary activities under the Insurance Act 1966.
MAS Imposes Prohibition Order on Former Prudential Representative for Cheating Offences
The Monetary Authority of Singapore (MAS) has imposed a five-year prohibition order on Huang Mengting, a former representative of Prudential Assurance Company Singapore Private Limited, following her conviction for cheating offences in the State Courts. Huang’s actions led MAS to believe that she would not perform financial advisory services honestly. The prohibition orders restrict Huang from providing financial advisory services, participating in management roles, acting as a director, or becoming a substantial shareholder in any financial advisory firm under the Financial Advisers Act. Additionally, she is prohibited from engaging in insurance intermediary activities under the Insurance Act. Huang’s fraudulent activities involved submitting false invoices to Prudential between July 2019 and November 2020, resulting in a payout of S$3,287.82 to her clients. She was convicted of four counts of cheating and sentenced to a six-week jail term, with seven other cheating charges taken into consideration during sentencing.
Singaporean AXA Agent Sentenced to Jail for Cheating Clients in Cryptocurrency Trading Scheme
Xie Huirong, a 27-year-old Singaporean insurance agent with AXA, was sentenced to two years and four months in jail for cheating his clients and acquaintances out of over S$193,000 (US$144,100) after suffering losses from cryptocurrency trading. Xie tricked victims, including a single mother, his own aunt, and an NTU research fellow, into giving him money under false pretexts related to insurance policies and investment opportunities. He also defrauded individuals by promising to sell COVID-19-related items and forging documents. Despite making partial restitution, Xie was convicted on six charges of cheating, with 11 additional charges considered. The prosecution sought a sentence of 33 to 43 months, citing significant financial losses and the premeditated nature of Xie’s offenses.
MAS Bans Former Aviva and AXA Representatives Over Unlawful Recruitment
Several former representatives from insurers Aviva and AXA, along with another individual, have been banned by the Monetary Authority of Singapore (MAS) for varying durations due to illegal recruitment of unlicensed individuals for financial advisory services. Mr. Kelvin Tan Yaosheng and Mr. Victor Wu Zhao Heng, former Aviva representatives, received three-year bans, effective June 22, 2023. They are prohibited from financial advisory services and any management roles in financial advisory firms. Former AXA representatives Jeremy Tan Hongxiang and Phua Shu Rong received bans of five and four years, respectively, while Tong Hui Zhi received a ban for five years, effective immediately. Investigations revealed Tong sold 13 insurance policies without authorization, with Phua and Jeremy Tan facilitating the sales. Tong’s commissions were transferred to Jeremy Tan and herself, deceiving policyholders and AXA. Kelvin Tan and Wu recruited an unlicensed individual, providing access to Aviva systems for submitting policies. MAS emphasized the importance of licensing requirements to protect the public and warned against circumventing these regulations.
Former Chubb Insurance Employee Charged with Cheating, Fraud, and Forgery in $8.9 Million Scam
Suyandi, a former employee of Chubb Insurance Singapore, faces 22 charges, including cheating, forgery, and falsification of accounts, for allegedly orchestrating a scheme that led the company to pay out over $8.9 million in false claims. Over a seven-year period, Suyandi is accused of deceiving the company into processing nearly 300 false claims and directing payments to third-party bank accounts. Additionally, he allegedly created fraudulent emails on 58 occasions to authorize payments totaling more than $1.6 million. Investigations revealed that around $55,600 from these accounts were laundered to Suyandi’s personal bank accounts.
Common Insurance Scams in Singapore
One in Five Motor Claims in Singapore Fraudulent, GIA Reports
The General Insurance Association (GIA) of Singapore reveals that approximately 20% of motor claims in the country involve fraudulent activities, including exaggerated injury claims and vehicle damage reports. These scams, often orchestrated by sophisticated criminal networks, have far-reaching consequences for both insurers and policyholders. Simon Birch, CEO of Budget Direct Insurance, emphasizes the importance of individual vigilance in combating fraud, alongside insurers’ use of advanced technologies. A significant case involving a SG$1.6 million scam, masterminded by a workshop owner and impacting multiple insurers, underscores the severity of the issue. Common scams include staged collisions and falsified accidents, prompting motorists to adopt preventative measures such as equipping vehicles with dashboard cameras and promptly reporting incidents to authorities.
Spotting an Insurance / Investment Scam
Spotting and avoiding investment scams requires vigilance and skepticism. Here are some key red flags to watch out for:
- Be wary of unsolicited communications via phone calls, emails, online messages, or postal mail. If you receive such contact out of the blue, proceed with caution and consider ending the conversation or deleting the message.
- Investment opportunities promising unusually high returns, especially from alternative or unregulated investments, should be treated with skepticism. Remember, if it sounds too good to be true, it probably is.
- Be cautious of invitations that claim to be exclusive or require immediate action. Scammers may use tactics to create a sense of urgency, such as limited-time offers or pressure to keep the opportunity confidential. Take your time to thoroughly research and evaluate any investment before making a decision.
- Fraudsters often use sophisticated tactics to appear legitimate, including glossy brochures, professional-looking websites, fake reviews, and scripted phone calls. Verify the credibility of the investment opportunity and the individuals involved by checking regulatory authorities like the Monetary Authority of Singapore’s Investor Alert List.
- Beware of recovery fraud, where scammers target individuals who have previously fallen victim to investment scams. They may offer to recover lost funds or sell worthless investments, typically requiring an upfront fee. Exercise caution if you are contacted in this manner.
- Investment scams can take various forms, including schemes related to carbon credits, fine wines, storage facilities, land, precious metals, as well as traditional investment vehicles like shares, bonds, cryptocurrency, foreign exchange, and binary options. Stay informed about common scams and remain skeptical of any investment opportunity that seems too good to be true.
Insurance scams have posed a persistent threat in Singapore, necessitating a proactive approach to detection and prevention. Perpetrators exploit unsuspecting individuals with enticing promises of financial gains, only to engage them in fraudulent schemes. These scams range from fake insurance policies to unauthorized premium withdrawals, highlighting the importance of staying vigilant and informed.
To counteract these deceptive practices, it’s essential to educate oneself about common types of insurance scams and remain updated on emerging trends. By staying informed and adopting preventive measures, individuals can better protect themselves from falling victim to financial fraud. Through awareness and diligence, we can work towards a safer financial landscape in Singapore.
Secure your financial future by seizing control of it today. Initiate your journey towards stability and prosperity by arranging a thorough financial planning session with one of our MAS-licensed financial advisors. Don’t gamble with your tomorrow; make a wise investment in your future self!