These case studies have been modified so as not to identify any actual cases at FIDReC. They are provided for purposes of learning and are not necessarily indicative of outcomes at FIDReC.
Mr Tan was a 57-year old man who was literate in English but preferred to converse in Mandarin. He worked in a construction company. He went to the Bank branch one day for some advice as he had S$100,000 he wanted to do something with. At the Bank, he asked about fixed deposits and whether there were other products with higher interest rates. The Branch Sales and Service Manager, Mr Poon, attended to him and went through a Financial Needs Analysis. Based on Mr Tan’s responses, Mr Poon referred him to Ms Lee, an Insurance Specialist.
After asking Mr Tan a series of questions, Ms Lee suggested a certain insurance policy to Mr Tan. Ms Lee told Mr Tan that after paying monthly premiums of $1,800 a year for 5 years he could earn a good interest at the end of 10 years when the policy matured. The policy also had a death benefit and disability benefit. Mr Tan was attracted to all this. He quickly flipped through the documents shown to him and signed them. Ms Lee told him that he could discuss with his family when he got home as there was a 14-day free look period. Mr Tan said there was no need as he wanted the policy.
When Mr Tan went home, he kept the policy documents away in a drawer. Three months later, Mr Tan’s daughter found out about the policy and she made a complaint to the Bank on behalf of her father, stating that the policy was mis-sold to Mr Tan. She asked for a refund. When the Bank did not give her a response she was satisfied with, Mr Tan and her daughter came to FIDReC.
At the mediation stage, the Bank representative explained to Mr Tan and his daughter, who was assisting him as a nominee, that there was no mis-selling as the policy was suitable for Mr Tan because it met his needs and was within what he could afford. Mr Tan and his daughter were not satisfied. They insisted that the Bank had taken advantage of a vulnerable customer who did not fully understand what he was signing and decided to continue with adjudication.
At the adjudication, the Adjudicator considered the arguments of both sides and the evidence that was presented to him. He found that the policy was appropriate for Mr Tan and that the Bank had sufficiently explained the policy features and risks to him. From Mr Tan’s account he knew what he was purchasing at the time.
Key Learning Points
• Do not rush into purchasing any financial products. Take the time to consult with key family members if needed.
• Do consider various possible needs for your funds, especially before committing to any long-term policy.
• Do ensure that you read and understand any document before you sign it. Even if you can read English, ask for the technical terms to be explained to you if you do not understand them.
• After you have signed the documents to purchase an insurance product, do note that there is usually a free-look period of 14 days. You can change your mind within this time but do notify the insurance company quickly.
• The outcome may have been different for Mr Tan if the insurance product had indeed been unsuitable for him, for example, if it was clear that he was not able to afford the premiums, or if he could show some other form of misconduct on the part of the financial institution, such as its representative making false statements or failing to inform the consumer about important aspects of the financial product. In such cases, FIDReC has often been able to assist the parties to come to a mediated settlement.
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