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Investors unhappy with being left out. By Liyana Low.

“Non-vulnerable” deserve a chance at pay-out

Liyana Low / Writer

Investors who do not fall under the “vulnerable” group should have a chance at getting their money back from the financial institutions. This was the sentiment at Speakers’ Corner last Saturday where about 500 unhappy investors had gathered.

They were questioning the financial institutions’ decision to give priority to “vulnerable” investors. The event, organised by the former CEO of NTUC Income, Mr Tan Kin Lian, is the third to be held at Hong Lim Park.

Among those in the crowd was 49-year-old Kevin Lim.

He said: “Why should the “vulnerable” group get payment when all of us were clearly misled by the banks and the relationship managers who sold us the products?”

The issue of contention here, according to Mr Lim, was that both the non-educated and educated groups of people were equally misinformed by the banks.

Both groups of investors were assured that the structured products were “safe” and “low risk”, and is a good alternative to “fixed deposit” as they offer higher returns.

And since the educated people do not fall under the “vulnerable” category, they are worried that they might be left out by financial institutions in the pay-out.

During his speech, Mr Tan said that heunderstood many investors were unsure about how they will be treated, as they do not belong to the “vulnerable” group.

He is hoping that a fourth petition will help those who do not belong to the “vulnerable” group to get their money back. “The forth petition will be addressed to the chairman of MAS to ask MAS help find a collective solution to the mis-selling of products by the financial institutions,” he said.

But Tan also cautioned that it could be a long time before investors know if they would be compensated, as there are about 10,000 cases to be handled and the financial institutions will take a “case-by-case” approach. Furthermore, many of those affected have still not lodged their complaints.

Mr Tan hopes that MAS will advise the banks to deal with investors’ complaints collectively, rather than go through each case individually.This includes grouping the investors together according to the financial institutions that sold the products and requesting that the institutions hold an open forum with them to discuss how the investors were misled by the information and how they can be compensated for their losses.Taking these steps will reduce the stress on the individual investors in making the complaint and will ensure that fair compensation is given to all the affected investors.

Mr Tan also advised people to be honest when lodging a complaint with the financial institution.

“The most important point is to state how you were misled, and what you were told by the sales representative,” he advised.

“I think I have a case against the financial institution because I fall under the vulnerable category,” said a lady in her 50s who declined to be named. The secondary school graduate was there at Hong Lim Park to find out more about what she could do to get her money back.She said that the relationship manager from Maybank who sold her the product did not tell her that she was buying Lehmann Bonds.

She lost the money that was supposed to fund her son’s education, who is currently doing his ‘A’-levels. In addition, the single mother was diagnosed with stage three breast cancer last year, further worsening her financial situation.

When interviewed, she said, “I do not want any sympathy from anyone. I just want my money back.”

Forms were given out to the investors after Tan’s speech so that they could fill in the necessary information to lodge their complaint.

Volunteers, stationed at various parts of Hong Lim Park, were available to assist with explaining the information needed to fill in the forms.

Michelle,who works as an accountant, was at Hong Lim Park to volunteer and to help fill up the forms for those investors who could not fill them up in English.

She said that most of the people who approached her were lowly-educated people who went to the banks alone when they bought the products.

“So can you imagine how scary it is for them, to be alone in a room, without any mental preparation for all the complicated terms that a relationship manager might be giving them?” she said.

In addition, Mr Tan suggested that investors, who are unable to get a satisfactory compensation from the financial institution, could bring their cases to the Financial Industry Dispute Resolution Center (FiDREC), at the cost of $50.

FiDREC, which has the authority to pass judgments that are binding on the financial institutions, will form a panel to consider the complaints. At present, FiDREC can decide on claims of up to $50,000. It can hear larger cases, subject to agreement from the financial institutions.

He added that the decision is not binding on consumersand that consumers will still have the right to take their case to court, they were dissatisfied with FIDREC’s decisions.

But to those investors who wish to take collective legal action, Tan advised them to consider it as the last resort as it could be costly and risky. Investors should measure the cost and the chances of winning the case.

“If you lose the case, not only do you have to pay your lawyers, you might even have to pay the banks for the cost of legal action as well,” Mr Tan cautioned.

According to Mr Yong S.C., 57 - a volunteer in charge of helping investors from Hong Leong with their complaint forms - people now at least have a better understanding of what they can do to get their money back as compared to previous weeks.

Through these sessions, he hopes that both the vulnerable and non-vulnerable groups of investors will be able to get fair compensation.

The fourth gathering at Speakers’ Corner will take place next Saturday.

Pictures by Ma Xianrong.

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