Singapore authorities highlight sharp spike in online trading fraud

June 2, 2018 TH Author

Singapore’s law enforcement and financial industry regulator have issued an alert about rising fraud incidents involving online trading platforms.

Commercial Affairs Department (CAD), which operates under the Singapore Police Force, and Monetary Authority of Singapore (MAS) said 142 reports were filed last year from consumers who lost S$7.8 million (US$5.83 million) trading on unlicensed online sites. In comparison, 40 such reports were recorded in 2016.

The unregulated trading platforms offered various products including foreign exchange, commodities, and binary options, they said, noting that these sites typically were based outside Singapore. This made it tougher for affected consumers to pursue claims against such operators.

Furthermore, investors often would have to transfer funds to overseas bank accounts held under names that were different from those operating the trading platforms. In addition, some would instruct investors to pay for their trades or fund their trading accounts using credit or debit cards, which could potentially lead to unauthorised transactions made on these cards.

These trading sites were not licensed or regulated under Singapore’s Securities and Futures Act, which outlined rules licensees would have to observe and that were put in place to protect consumer interests, such as disclosure requirements on investment products.

MAS’s assistant managing director for capital markets, Lee Boon Ngiap, said: “There is no regulatory safeguard for investors who choose to transact on unregulated trading platforms…operated by unregulated entities whose backgrounds and operations cannot be easily verified.”

He advised consumers to check and verify the site’s credentials before proceeding with the trade.

CAD’s director David Chew Siong Tai warned consumers against investment opportunities that promised high returns with assurances of little or no risks. “These are likely to be a scam; if it is sounds too good to be true, it most probably is,” Chew said.