Protecting consumers from scams

Mr. Tan,
Do you expect the government to protect people who are stupid enough to put their money into nothing more than somebody's word? For example, if someone got people to give him $1 million - saying that he would give them 20% return by passing the money on to his anonymous friend involved in some business, and one year on, - the anonymous friend had disappeared?

REPLY
There is nothing that the government can do, if they are not aware about this activity. However, if there is a report of such activity, it is the duty of the government to investigate if the people are crooks that goes about cheating other people with scams.

In the case of land banking, which is really a collective investment scheme, there is a need to regulate these activities, as it has been done in most countries. The regulation will ensure that the money is collected and used for its legitimate purpose and is not misappropriated.

There is also a need to ensure that the managers act honestly in the interest of investors (i.e. fiduciary duty) and pay the appropriate price for the land. They cannot "cheat" the investors by paying an inflated price for the land, especially if they buy from a connected party where there is a conflict of interest.

Where the investment scheme is advertised in the media to the general public, it is necessary for the product to be regulated and approved.

I do not expect the government to protect people from foolish investments or to compensate them for their loss. But the government should at least ensure that crooks are not free to cheat other people without any restraint.

Tan Kin Lian