LOSING ALL IN GET-RICH SCHEMES.

PETALING JAYA: The lure of making a fast buck or easy money has opened up opportunities for various organisations to come up with ingenious ways to attract the public to invest.

Such schemes, known locally as “skim cepat kaya”, have made Malaysians lose millions of ringgit.

According to the police’s Federal Commercial Crime Investigation Department, there were 17,311 cases opened for investigation last year, a massive jump of 26.6% from 2007.

The department said that one bright spot in all these cases was that actual financial losses were down to RM845mil last year, compared with RM1.9bil in 2007.

Most of these schemes thrived in “grey areas” which can only be loosely regulated despite the best efforts of the authorities to clamp down on culprits.

Many of them operate under the guise of multi-level marketing operations which blur into pyramid schemes, which are illegal.

A market observer pointed out that these establishments would promise returns that even top fund managers found hard to attain in good economic times.

Many of them operate like Ponzi schemes which made no or little actual investments from money collected from the public.

Often in such schemes, the earlier investors would usually get some returns, compared with those who join later.

Surprisingly, many of those who are employed as agents with these businesses do not think such schemes are illegal.

“How can it be a scam when I can make money?” an agent attached to an established restaurant chain said.

The restaurant has half a dozen outlets in the Klang Valley and offers the public membership for a fee which entitles them to make money from eating at the outlets and through referrals.

What makes it interesting is that several of these establishments found taking deposits or cash from the public have been operating for a number of years without ever being questioned by the authorities if their operations are legal.

In the past one-and-a-half years, there has been a significant rise in such operations.

Their aggressive and “successful” marketing approach has even become somewhat of a trend, and has been adopted by many other restaurants to boost sales.

If one were to google the term “scams in Malaysia”, one would find a slew of businesses which concerned citizens have exposed as a “bit dodgy”.

However, the people who run such operations appear nonchalant about the amount of media and Internet attention on their businesses.

They are able to navigate their way around existing laws and capitalise on their marketing strategies before the law catches up with them.

Starprobe decided to investigate a number of these business operations to find out their modus operandi following a number of helpful suggestions from concerned readers and members of the public, especially cases which relate to non-financial institutions.

The response from an official of the Registrar of Companies (ROC) was that it had no jurisdiction to control the activities of such companies.

“If the company is registered with an identifiable business, how they market their products or services is not within our purview,” the official said.

But with regards to companies illegally taking deposits without having an investment licence, Bank Negara has the right to investigate and prosecute them. In fact, from last year until now, 19 companies have been under investigation and raided.

While the authorities are trying their best to enforce the laws, the sheer number of these operations make it an uphill task.

The situation is compounded by having different agencies with different jurisdictions conducting investigations independently, thus not giving a clearer picture.

For example, Consumer Claims Tribunal chairman Rungit Singh said his tribunal has jurisdiction only over consumer complaints and concerns. The tribunal is under the purview of the Domestic Trade and Consumer Affairs Ministry.

“Once a person invests in a scheme, that person is not protected under the consumer laws,” Rungit Singh said.

According to him, consumer laws only cover complaints regarding goods and services and do not have jurisdiction over investors.

And on multi-level marketing, an official from the Consumers Association of Penang said such companies were perfectly legal as long as they were licensed by the Domestic Trade and Consumer Affairs Ministry.

“However, some multi-level marketing operations get into grey areas when the bulk of their sales are not derived from products or services but rather from other forms of collections,” she said over the phone.

She added that a sign of a possible scam was when most of the earnings of the company is derived from activities unrelated to the sale of goods or services.

According to a commercial crime lawyer who did not wish to be named, the law regarding legal and illegal activities was clear.

“However, access to critical information may be time-consuming and the prosecution of those who deliberately go against the law will require substantial evidence,” he said.

The lawyer said there was a need for easier and quicker access to information on registered businesses, possibly delivered via a centralised system and an oversight board with experts for the public to turn to for complaints, advice and information on confirmed scams.

“There is a need for a quicker mechanism to identify and respond to scams before more people lose their money,” he said, adding that many of the scams had invested little in their marketing strategies and did not have a business continuity plan.

The lawyer said it should be noted that there were also a number of people who were either gullible or prepared to take higher investment risks driven purely by greed, despite the best of advice.

A source who tracked such scams said it was near impossible to keep tabs efficiently on them.

“That’s the biggest problem, there are thousands of such scams involving hundreds of millions of ringgit out there that the relevant agencies are not able to track all of them. They’re only able to pursue the ones that have been brought to their attention,” she said.

She added that the answer was not more regulation but more awareness of such scams.

“Awareness is better now than before, we have more inquiries coming in on various businesses,” she said.

(Source: July 13, 2009, The Star Online)

AIA MALAYSIA: FINANCIAL STATEMENTS & INVESTMENT LINKED FUNDS ANNUAL REPORT 2008.

For details, please click Financial Statements and Investment Linked Funds Annual Report.

GENERAL INSURERS SUFFER LOSSES FROM MOTOR SEGMENT AGAIN.

For details, please click Business Times.

INSURANCE FIRMS SEE RISE IN CLAIMS.

For details, please click Business Times.

CIMB WEALTH FORMS ALLIANCE WITH AIA BERHAD.

For details, please click The Star Online and Business Times.

AIA ACHIEVES SOLID OPERATING RESULTS DESPITE CHALLENGING ENVIRONMENT.

For details, please click English, Bahasa Malaysia or 华文.

PLEASE BE CAREFUL EVEN YOU ARE HOME.

We will know the importance of insurance in our life after we have watched the video clip above. For details, please click here.

YOU ARE STILL INSURED EVEN YOU DON'T BUY ANY INSURANCE PLAN.

Does the sentence above sound weird?

When a person doesn't buy insurance like medical card and personal accident, he is still insured. Why? It is because he is the insurance company. He pays his medical bills himself.

WHY SHOULD EVERY CONSUMER BUY MEDICAL CARD?

We can be hospitalized due to a critical illness and an accident. An accident can happen any time to anyone. As we all know, a private hospital is a very realistic organization. If we don't have enough cash, the doctors there will not save our life.

We can go to a government hospital. The medical bill there is very economical. However, we need to wait for a long time before we get a treatment. When we are injured seriously, do we have the time and patience to wait? If the answer is no, every consumer should have at least one medical card.

Of course, a medical card doesn't guarantee us an admission to all hospitals without a deposit in Malaysia like what I have explained previously in my post titled WILL A HOSPITAL ACCEPT OUR MEDICAL CARD AS A GUARANTEE OF ADMISSION TO THE HOSPITAL WITHOUT A DEPOSIT? (March 17, 2009). But, it at least helps us to admit to all of the panel hospitals of an insurance company without a deposit.

WILL A HOSPITAL ACCEPT OUR MEDICAL CARD AS A GUARANTEE OF ADMISSION TO THE HOSPITAL WITHOUT A DEPOSIT?

A medical card is not a credit card and therefore will not be accepted by some of the hospitals in Malaysia. The medical card is to help panel hospitals to recognize us as policyholders of an insurance company.

Sometimes we have to pay a deposit and our medical bills ourselves first even we are admitted to a panel hospital. Why? To know the reasons, please read my post titled WHAT ARE THE REASONS A POLICYHOLDER CAN'T MAKE A CLAIM FROM AN INSURANCE COMPANY? (March 25, 2009).

IS A MEDICAL CARD THE ONLY CARD WE NEED?

We can be admitted to a hospital due to a serious road accident besides a critical illness.

In the insurance market, there is no one medical card that guarantees policyholders an admission to all hospitals in Malaysia without a deposit. Hospital A is a panel hospital for insurance company X but it may not be a panel hospital for another insurance company Y. In other words, there is no one insurance company which has all the hospitals in Malaysia as its panel hospitals.

So, what are the possible solutions to encounter this situation?

We can buy more than one medical card from different insurance companies like AIA Berhad, ING Insurance Berhad, Prudential Assurance Malaysia Berhad and so on. All insurance companies have their own list of panel hospitals.

Besides that, we should bring alone several credit cards with a high card limit. Why? If all of our medical cards are not accepted by a hospital, we can still use our credit cards to settle our medical bills. After discharging from the hospital, we can claim our money from the insurance companies.

If we don't have medical card and credit card, what we can do is bring along a lot of cash. I personally think that this way is not a good solution as it is no longer safe in certain places in Malaysia if the world economy doesn't recover fast.

WHY IS IT NOT RATIONAL TO TERMINATE OUR INSURANCE PLANS WHEN THE ECONOMY DOESN'T PERFORM WELL?

When the economy is bad, unemployment rate increases. Many people are jobless. They have no income but they still need to eat. If they still can't find a new job, some of them will be forced to commit crimes like robbery, snatch and others. As a result, crime rate will increase. When crime rate increases, our safety will be threatened. We may become the next victims of robbery and snatch.

Of course, having an insurance plan doesn't reduce crime rate in Malaysia. But, it at least helps us to cover our medical bills when we are injured due to an accident, robbery and snatch.

In sum, it is not wise to terminate our insurance plans when the economy performs badly. If we really can't afford it, we can try to reduce our annual premium by reducing our coverage.

HEALTHCARE ISSUES IN MALAYSIA.

The following articles are about the healthcare cost and problems that significantly affect everyone of us in Malaysia:

• Rising pressure of healthcare cost
• Getting a lifeline with definitive health policy
• Generic drugs vs branded ones
• Room for more hospitals
• Providing patients quality service
• Private hospitals move towards specialised disciplines to meet demand
• Medical insurance still affordable in Malaysia
• Work together to ea$e the pain

Source: The Star Online, Business, March 14, 2009

THE STRATEGIC PARTNERS OF AIA BERHAD.

There is another good news for AIA Berhad. RHB and CIMB Wealth Advisors are now the strategic partners of AIA Berhad. AmResearch views RHB Bank's bancassurance tie-up with AIA Berhad positively although there are no details on it as yet.

The good news will disprove all the rumours saying that AIA Berhad is going to bankrupt.

WHICH HOSPITAL SHOULD WE GO IF WE HAVE MEDICAL CARD?

If we don't want to pay our medical bills ourselves and the situation is not urgent, we should go to the nearest panel hospital. If the situation is very urgent, we must go to the nearest hospital and claim our medical bills from insurance companies later.

A FACT SHEET ISSUED BY AIA BERHAD.

AIA Berhad, as a locally incorporated company under the Insurance Act 1996, has issued a fact sheet which covers its financial position for the financial year ended 30 November 2008.

For the financial year ended 30 November 2008:

• Total assets as at 30 November 2008 was in excess of RM 17 billion of which more than 97 % of the invested assets are in Malaysia.
• Profit before tax was RM 428 million.
• Surplus above the solvency margin requirement as at 30 November 2008 was RM 2.3 billion.
• Capital Adequacy Ratio as at 30 November 2008 under the Risk-Based Capital Framework was 266 %, well above the regulatory minimum of 130 %.

March 3, 2009

AIA HAS ASSETS OF MORE THAN $ 60 BILLION.

Here is an article from Reuters about the financial status of AIA group.

TWO MESSAGES FROM CEO OF AIG GENERAL INSURANCE (MALAYSIA) BERHAD.

To know the recent news of AIG General Insurance (Malaysia) Berhad, please click here and here.

GOOD NEWS FROM CEO OF AIA BERHAD.

Mr Khor Hock Seng, the CEO of AIA Berhad, has updated us with good news about the AIA group and its future path. To me, it is really a good news for all people including AIA insurance agents, AIA policyholders and even stock market investors in Malaysia. For details, please click here and here.

TIPS FOR THE BEST MEDICAL EXAM RESULTS.

Okay, we are applying for medical card and we have been told that the insurance company requires a medical exam (usually paid by the insurance company). The exam typically consists of blood and urine samples, blood pressure readings, height and weight measurement and a medical questionnaire. Information from the medical exam will be used by the insurance company to help determine our health class. The health class the insurance company assigns us will determine our premium rates. So, it is very important that we get the best medical results.

The following tips are to help us attain the most favorable and accurate exam results:

• If we can, it's best to fast for a period of at least eight hours prior to the exam. This step will result in more accurate blood test results. Early morning appointments may be appropriate.
• If we must eat prior to the exam, no heavy meals and little or no caffeine on the morning of the exam. Decaffeinated coffee and a light breakfast would be best.
• Stay off salt for 3-4 days prior to exam. This step may have a beneficial effect on our blood pressure.
• No alcohol for 24 hours prior to the exam as alcohol tends to elevate blood pressure for 12 -24 hours.
• Get a good night's rest before the examination.
• If we smoke, don't smoke within 30 minutes of the exam. Smoking tends to constrict artery walls and elevate blood pressure.
• If we have an acute illness (i.e. the 'flu'), we should consider rescheduling the exam as some acute illnesses affect the urine and blood tests.
• (For female only) We should tell the examiner if we have our menses as our urine will be affected and a notation can be put on the lab slip.

Source: Modified from http://discussion.lifeinsure.com/