SCAM WARNINGS

Over the years, there were many 'Debt Management Companies' claiming they are able to help.   They promised the world but once payments are made, promises are never fulfilled, with them citing many reasons.  By then you will be a few hundred dollars poorer but nowhere closer to your solutions.  Beware of such companies and do spread the word around so that less people would become their victims.

Here are just some examples:

1) Companies that only have ONE solution - BANKRUPTCY
They always claim of being able to assist in getting installment plans with your creditors even though they obviously lacked the resources to achieve it.  (E.g. No office, no experience, one-man show). Since they do not have the necessary resources, their only recommendation is always to file for Bankruptcy.

INSIST on seeing them in their office. (Those who do not have an office will always claim to be around your area). DEMAND to see their past works that show that there are indeed such correspondences between them and creditors.  Always seek a second opinion if the only solution recommended is Bankruptcy.  Your choice must not be based on these companies limitation and ensure that this is indeed your only option left.

2) Loan Companies
They are supposedly brokers of foreign financial institution and are able to secure loans on your behalf.  Unfortunately this is virtually impossible as no banks would extend a loan to a foreigner unless you are holding some form of employment or assets in their country.  Logic being should you default in payments, cross border recovery is extremely expensive and complicated.  If this was possible, no foreign bank would bother to have a branch in Singapore nor see a need to hold a banking licence (Partial or Full). 

3) Hire Purchase Loan Sharks
They require the desperate debtors to buy the latest electronic gadgets on hire purchase and sell it to them for cash.  The current market rate now is 50% of the purchase price. (Not how much you will be paying!!!)  What they do not tell you is that under the "Hire Purchase Act", it is illegal for hirers to sell goods before it is fully paid.  The hirer can be charged with criminal breach of trust, even if he eventually becomes a bankrupt. The buyer of the goods can also be found guilty of receiving property that had been obtained dishonestly, offences that carries both fines and 3 year jail terms. (ST 24/4/2005)

4) Renovation Loans Scam
They get 'clients' to apply for loan with false quotations.  When the loan is approved, the money is credited to the contractor, who takes a 20% - 25% cut and the applicant gets the balance.   Either very little or no renovation is done at all.  What they don't tell you is that banks sometimes do go to homes to verify if renovation is indeed being done.  The maximum for such cheating is seven years' jail and a fine.

5) Owners of Debt Management Companies
The most important would be the Owners of Debt Management Companies. Do they have history of financial troubles or litigation and bankruptcy suits filed against them?  What are the reasons for constant changes in the company ownership?  If they are unable to control their own financial status, how could they be in a position to advice their clients accordingly?  If a fat person claimed to have helped thousands to lose weight, would you believe him?  Should you entrust YOUR financial future to these people?  If wrong advices are given and mistakes are made, the effect of such mistakes would be disastrous and will only be felt by you and your family.  Always do a search on the company and its owners, the small fee spent and time wasted can save you a lot of potential problems.

In 2004, a Company called J C Capital International promised clients ridiculous reduction of monthly payments and low interest rates.  They had testimonials from "satisfied clients" which supported their claims of helping thousands in Singapore.  They insisted that clients deposit money directly into their bank account including advance money meant for the banks and they actually charged monthly MANAGEMENT FEES for receiving advance payments.  The promises were never fulfilled and eventually some of their clients made police reports and an investigation eventually led to the directors being charged for cheating.  It was later discovered that : -

1)All the directors had no prior experience despite their claims in dealing with financial institutions.
2)The directors/owners had faced similar financial problems as the clients they were supposed to help.
3)All the wonderful testimonials and claims were falsified.  In fact, one was formerly a hawker before he became a director of the company and another had a string of legal suits against him for credit cards default.

Unfortunately by the time they were exposed, a total of a few hundred thousands dollars were cheated from many needy clients and none of their clients were able to recover their hard earned money, including those intended for the banks as payments.

6) Creating Claims, Strategic Partners & Accreditation
There are Debt Management Companies who creates non-existent overseas strategic partners, agencies and foundations to falsely support and boost up their credentials.  Existence of such foundations must be verified.  If such companies can resort to creating false credentials, what else are created?  Should you and could you entrust your financial future to companies with such behavior?  Claims of being an ex-banker, being connected or associated with some organisation would only be valid if it even exists. Ask for the name of the supposed banker, meet up with him or verify the existent of such organisation.

All the above points are important to note as it indicates the INTEGRITY of the firm and its officers.  If they can and are willing to lie to get your business, what else are they lying about or hiding from you?

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