There is a wide range of products and schemes, both in Singapore and globally, that claim to offer consumers potential profits. Some of these are offered and traded in markets or by firms that are regulated. However, there are others that are not regulated by financial sector regulators like MAS.
Deal with regulated persons if you are seeking financial services
Consumers seeking financial services are strongly encouraged to deal only with persons that are regulated by MAS. MAS' regulatory regime aims at safeguarding the interests of consumers by ensuring that only competent and professional persons may provide financial services. The laws administered by MAS also require disclosure of information on investment products being recommended to consumers.
Click here to find out what you can do to check if the party you intend to deal with is authorised by MAS.
Pitfalls of dealing with unregulated entities or schemes
If a consumer chooses to participate in schemes that are not regulated by MAS, he/she will not have the protection afforded under the regulatory framework administered by MAS, particularly if the operators are based overseas. If he has a complaint against an unregulated entity, he will also not be able to approach the Financial Industry Disputes Resolution Centre (FIDReC) for assistance. And if an operator is based overseas, it could be even harder for the consumer to pursue the matter.
It is very important that consumers check the legitimacy of such schemes, rather than just focusing on the offered returns, particularly where the scheme promises returns are much higher than the returns offered by established investment schemes/products regulated by MAS. If something is too good to be true, it probably is.
When consumers put their money into such unregulated schemes, they do so at their own risk. Read more in the consumer alerts below:
Common Unregulated Schemes
Below are weblinks to information on some unregulated schemes and key risks consumers should watch for. This list is not exhaustive. It is updated from time to time, based on information received by MAS.
You may have heard of virtual currencies. If you are wondering what they are and how they work, read this article to find out the features and risks involved in virtual currency schemes.
Received an offer to invest in trees, crop plots or plantations? Consider carefully before deciding whether to place your money in these schemes. Click here to read an article by the UK Financial Conduct Authority.
Enrichment classes: Gain a new skill, enjoy new riches? Think again!
You may have caught attractive ads on forex or other trading seminars in the media. They sometimes come with amazing success stories: the chance to retire early, earn extra income or make some money after years as a home-maker are appealing. But there have been mixed reviews of these seminars. Some investors have also lost money trading, on top of paying out hefty course fees. Click here to learn more about what forex trading is about and key things to think about before parting with your money.
Unregulated online trading platforms
Get up to 85% profit in just 60 seconds! Make 81% profit in just quarter of an hour!Make money 24/7, wherever you are!Find these catchy phrases attractive? Think again.
Consumers who place their money with unregulated online trading platforms, some of them offering exceptionally high returns, forego the protection afforded under the regulatory framework administered by MAS. These investors, when faced with problems from these unregulated entities such as having their funds transferred to other entities, not being able to close their accounts or difficulties in having their capital returned to them, will not be able to rely on MAS regulations to safeguard their interests.
To find out more on the risks of trading on unregulated online trading platforms and forex trading , click here.
Look before you leap - pitfalls of dealing with unregulated entities
We sometimes come across investment seminars or schemes that claim to offer high returns, at low risks. These look very attractive. But what are the risks? Click here to find out more about the pitfalls of dealing with unregulated entities!
Gold buy-back schemes: Before you rush in, click here to read the article (Source: The Sunday Times © Singapore Press Holdings Limited. Reproduced with permission) to find out more.
Received an offer to invest in undeveloped land in a foreign country, with the potential to double, treble or multiply your money in a few years? Attractive as this may sound, consider carefully before you part with your money. Even if you are presented with financial reports showing the possibility of consistent and high returns for the investment, or testimonials of how other investors have benefited from land banking, take a step back and consider what the risks are. This is critical. Click here to find out more.
Other Consumer Alerts
A binary option is a type of option contract that references an underlying instrument. The underlying instrument can be from asset classes such as stocks, commodities, currencies and interest rates. Unregulated platform providers often use marketing catchphrases, such as "trading with zero risk", "trading amounts of as little as $1", and "profit payout of 500% per trade", to entice you to invest in binary options. However, binary options are in fact speculative and risky investment instruments and you could lose the entire investment amount. Find out more.
Also, check out the police advisory on online scams involving binary options and MAS' media release on risks in trading binary options with unregulated platforms.
MAS started the FinTech regulatory sandbox in June 2016. The sandbox allows firms to experiment with new technology, and offers innovative financial products and services - but within a clearly defined space and for a limited time period. The sandbox experiment usually would only allow the product or service to be offered to a limited number of customers, or limit the number of transactions allowed within the pre-set sandbox period.
Phishing - How to Avoid Becoming a Victim Have you received spoofed emails claiming to be from your bank, credit card company or service provider? Read about phishing, a technique used by fraudsters to obtain sensitive personal information such as your account details, PIN, credit card number, user ID or password through the Internet, and how you can protect yourself from becoming a victim.
Understanding Two-Factor Authentication Two-Factor Authentication (2FA) was implemented to improve the security of internet banking. Click here to read more on 2FA and things to take note of when performing online transactions.
Making SENSE of Internet Banking Security Increasingly, more and people are using the Internet banking to conduct financial transactions. Click here to find out more about simple steps you can take to protect yourself when conducting such transactions.
Received an offer for a windfall? Beware of scams! Be careful if you receive unsolicited letters or emails offering deals that seem to be too good to be true, appear to come from well-known institutions, request for confidential information, and/or give instructions to transfer funds to a third party or account. Such mails are typically scams intended to defraud. Click here to get some tips on how you can protect yourself from scams.
Protect yourself against bogus investment opportunities Cold calls, emails or bogus internet websites are common techniques used by unregulated persons to solicit business for bogus investments. Click here for tips provided by MoneySENSE on how you can protect yourself from falling prey to such schemes.
Paying the price for your overseas inheritance or lottery winnings Some of you may have chance upon emails, calls or letters informing you of various scenarios where you are about to receive a huge sum of money. Click here to get some tips on how you can protect yourself from scams.
Get fast cash, high returns with CPF savings! Be careful! Do not invest based on promises of quick and attractive returns alone. You are advised to ignore advertisements which tout conversion of CPF into cash. You should invest prudently and consider the suitability of the products according to your own risk appetite and investment objectives. Investments should not be made based on promotional gifts and rebates. Click here to get some tips before investing your CPF savings.