5 Seemingly Legitimate Scams to Beware of in Singapore

3 min read

Even as crime rates remain low and the streets are safe to walk at night in Singapore, there has emerged a litany of seemingly legitimate scams that fool a certain number of people into parting ways with their hard-earned money. With the issue of the spread of fake news generating some buzz lately, the need to be alerted to scams is pertinent.

#1 Multi-level Marketing (MLM) Schemes

Ever heard of this phrase being used when a friend tries to get you to join an MLM scheme – “Let’s make money together, but first you have to pay a membership fee”?

Something along those lines, but you get the idea – which legitimate business would ask their “employees” to pay a membership fee before “working” for them?

MLM schemes are not new to Singapore, with the authorities having a Multi-Level Marketing and Pyramid Selling (Prohibition) Act enacted since 1973. While such a law remains in place, it would be difficult to retrieve the money already “invested” into the scheme, with most people being able to obtain even a fraction of what they pumped in.

Worse, for some, this money constituted their life savings. The most infamous case to shake the MLM industry in Singapore would be that of Sunshine Empire where “self-styled James Phang Wah promised huge returns” in what was essentially a Ponzi scheme, as reported by The Straits Times.

How such schemes work is by paying the first batch of investors, who upon seeing that their “investment” has brought about good returns, will vehemently stand by the legitimacy of the scheme while roping others into the scheme to increase their payouts as part of a fraudulent “referral fee”.

What’s infuriating is how these schemes tend to recruit others based on the vague definition of “entrepreneurship”.

To understand more about such MLM schemes and to protect yourself, John Oliver from the popular American late-night show, Last Week Tonight, summarises the perils of falling prey to an MLM scheme in a neatly detailed video uploaded in early November 2016.

If you’re into a candid conversation or wish to hear what others feel about MLM schemes, there is a thread on the popular local forum of Hardwarezone.


#2 Dealership Scams: Buying Cars from Dealership Companies

It’s easier said than done when it comes to determining whether a company involved in the parallel importing of cars is a trustworthy one. However, in the past year, there have arisen at least two cases of companies folding up, with their owners running away with the money from the ‘sale of cars’.

Probably the most common feature of dealership scams seen in Singapore is that the company is usually newly registered. One can check information about the company from ACRA’s website as well as other social media platforms where previous buyers may have left reviews. However, these reviews may have also been faked.

To protect yourself, ensure that you have paperwork on hand and to check what you have signed. It is important that you get a log card from your dealer and if you do not get one, it is imperative that you log onto the one.motoring with your Singpass details to check. If you still do not see your details within a week, you might want to start calling the car company.

Another scam that’s seen in the industry would be how some car agents would attempt to offer a high amount of personal or company loan with low interests rates.


#3 E-commerce Parcel Scams

With e-commerce sales booming year after year, there has been an accompanying in the number of scams related to the industry. The Straits Times reported in July 2016 that a foreign syndicate ran a DHL phone scam that duped approximately 155 people and brought in $12 million in a time span of four months.

Perhaps such scams work because some people are not as well-informed about e-commerce safety practices that companies adopt – no company would ask for your personal information over the phone, especially your credit card information.

The exploitation of the lack of knowledge as well as that of slow mental reflexes may result in a window of vulnerability that results in a rational person falling prey to such scams.


#4 Agency Phone Scams

With every turn, each scam becomes seemingly legitimate, with some outrageously assuming the roles of government agencies or companies.

For instance, according to an article on the different types of scams in Singapore published by The Straits Times in July 2016, the Ministry of Manpower (MOM) “raised the alarm over a scam involving bogus phone calls by a person impersonating a ministry or government official”, with the scammer asking for money to be transferred to an account on the pretense of  resolving “issues related to their stay in Singapore or work pass application”.


#5 Money-for-Sex Scams

Also known as credit-for-sex scams, given how most of these scams are conducted via the amorphous Internet, men are approached by women on social media platforms with requests asking them to buy gift cards and certain products online, in return for sexual services that these men do not get.

The Straits Times reported in June 2016 that credit-for-sex scams have “robbed men in Singapore of at least $422,000 this year”.

Perhaps the reporting of such scams is hampered by its seemingly embarrassed nature where, as written in a Straits Times article and neatly summarised by Consultant psychiatrist Adrian Wang who remarked that, “Victims of such scams are emotionally vulnerable and, to some extent, also naive and not Internet savvy. After being scammed, they are probably too embarrassed to report the crime.”


Amongst all other things, there exist an array of scams out there, ranging from Internet love scams to supposedly sophisticated trading robots. It is important to shed light and share with others to stem the increase in victims falling prey to scams.

Seedly is an everyday personal finance assistant that aggregates your financial data across up to 6 local bank and card accounts and gives you a complete personal financial picture. We currently serve over 6,000 users and growing in Singapore and are supported by NUS Enterprise, TOP 9 DBS HOTSPOT startup and East Ventures. We aim to become the #1 personal finance management app in Singapore and the region.


Join us where all the fun's at, TELEGRAM!