In Singapore, you might not find scammers at street markets who’ll try to charge you five times the actual price of an item, or street hawkers who harass you to buy things you neither want nor need.
But despite the country’s shiny, purportedly corruption-free exterior, that doesn’t mean that Singaporeans don’t still fall for scams. They’re just a lot more subtle and draped under the guise of legality. Here are four perfectly legal ways Singaporeans get tricked into losing money.
Attending expensive investing seminars
If you’re one of the few people who still maintain a subscription to the physical edition of one of our local papers, you see those ads almost every day—clarion calls to attend investment seminars that will teach you the secret to getting rich, whether through forex trading, stock investing, real estate investing or whatever. Often, there is a free first session, in which the organisers try to coax attendees into signing up for their paid workshops.
These investing workshops don’t come cheap, and attending a two- or three-day seminar is likely to set you back a few thousand dollars.
The problem with these seminars is that their organisers often present their methods as foolproof, with a close to 100% chance of success.
In actual fact, many of these purported investment schemes are just dumb-downed investing methods some guy came up with to scam people of their cash. And no, if you follow them to a tee there’s a good chance you won’t make the high returns they promised.
Of course, it’s a lot easier to hang on to some so-called investment guru’s supposed no-fail scheme than to attend a legitimate seminar that teaches you the actual basics of investing—SGX organises free and relatively inexpensive investment seminars if you’re interested.
Joining MLM schemes
Out of the blue, you receive a text from an old friend with whom you share great memories but whom you haven’t seen in many years. You eagerly accept the offer to reconnect.
So it’s Friday night and you’re finally seated opposite your long lost friend at the cafe or bar. You can’t wait to catch up and find out what’s going on in his life. So you suspect nothing when he starts talking about the “great business opportunities” he’s had, and how he much he looks up to this “mentor” who’s helped him to make so much money.
Before you know it, he’s dragging you along to a free seminar that magically happens to be right beside the place where you agreed to meet. Congratulations, you’ve just become part of the latest cohort of potential recruits in their multi-level marketing scheme.
MLM schemes usually involve a hefty buy-in. You’ll have to pay hundreds or even thousands of dollars for your so-called first supply of their products, which you’ll then spend the next few months desperately trying to offload on people before realising the only way you can make your money back is to trick other people into joining the scheme as salespeople.
Thinking a low credit card minimum payment sum is a good thing
We’ll be the first ones to tell you we love credit cards when they’re used in the right way—that is, when you pay your bills in full and on time every month, and are using the card to benefit from cash back, air miles and rewards points, and to build your credit score.
But of course, banks have to make money, and how they do this is by hoping their customers won’t pay their bills off in full each month.
When you fail to pay your bills in full, you get slapped with interest on the balance, usually to the hefty tune of over 25% per annum. When you pay your bills late, you get slapped with a late payment charge of at least $50. This, folks, is how banks make money out of you.
That’s why when a bank tells you they’re offering you a low minimum payment sum, it might sound like a good thing (Yay! No need to pay so much every month!) but it’s actually not. If you’re paying your bills in full each month like you should be, it shouldn’t matter what the minimum payment sum is.
Thinking payday loans are saving your ass
The first time you run out of money before payday comes around, you panic a little. You probably reach out to family and friends to borrow a bit of cash, or you ask your boss for an advance. But as the months pass, people start becoming wary, and you feel less comfortable asking for a loan.
So when you discover payday loans—these are essentially short-term, high-interest loans designed to tide you through until your next paycheck—you heave a sigh of relief.
Well, if you think payday loans are saving your life and are glad they exist, you’re so wrong. Having to take out a payday loan is a surefire sign that you are not in good financial health and need to either start earning more or spending less.
That’s partly because payday loans are so darned expensive. The interest rates you’ll be charged are often even higher than credit card interest rates thanks to the shorter durations.
And if you fail to pay back your payday loan on time, other than getting slapped with high penalties and having your credit score take a hit, we hope you like being harassed by burly debt collectors.
So don’t think payday loans are saving your ass—they’re actually a warning sign that you need to save your own.
What other misconceptions cause Singaporeans to lose money? Tell us in the comments!
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