This article was first published by Budget Babe.

Is it legal or ethical for influencers to peddle and push out investment schemes in Singapore?

I’ve been seeing Instagram influencers pushing out investment opportunities, promoting it to their followers and asking them to direct message them for more details. As a bystander, what more a blogger who writes about personal finance, this makes me extremely uncomfortable.

Some of these investment schemes were alerted to me by some of my readers, who requested for this blog post to be written for greater awareness and that hopefully, this reaches and helps to inform more people.

Case # 1: Forex Investment With Capital Guaranteed + 24% Fixed Returns!

Let’s look at this forex investment case which a reader came to ask me about because she was keen on investing (yep, she got “influenced”). I gave her my honest opinion, which was that forex is highly volatile and extremely difficult to guarantee profits all the time, while also sharing about how most people get burnt in the forex markets (including my own dad).

A local influencer with over 100,000 followers (whose name will be familiar to you guys here in Singapore, but I shall not name her) peddled this on her Instagram stories (where it disappears after 24 hours) a few months ago, and this was the exchange that took place with a reader who DM-ed her to find out more. I reproduce parts of the exchange here:

Look, I trust people I know and whom I can hold accountable if anything goes wrong.

But even if you trust an influencer just because you’ve been following her Instagram for some time, why would you park your investment with an influencer whom you don’t even know personally? Do you know their address? Their full legal name and residence? If anything goes wrong and they go Missing-In-Action, how are you going to track them down? Are you simply going to file a police report based on their Instagram handle?

Just because they’re famous on Instagram, does it make sense that you give them your money just like that?

Also, note how the investment arrangement promises guaranteed capital and 24% in fixed returns. Yes, 24% fixed returns! Trust me, even though I’m just some influencer on the internet whom you follow because you think I’m pretty and I actually have no business giving investment advice.

The said influencer above eventually stopped the investment scheme because there was supposedly overwhelming demand. I can only hope those who invested with her don’t live to regret it.

Case # 2: Durian Investment

The one that’s currently trending on Instagram is another local blogger who’s currently peddling a durian investment scheme to her 100,000+ followers.

This one too. Look at the guaranteed returns in durian trees you will receive!

Okay, so she trusts her dad. But why should you?

Even if you trust this Rachell Tan whom you barely even know in real life, do you know her address, phone number, NRIC and what not, so that you can make a police report or track her down just in case anything goes wrong? Or the same information about her dad?

Besides, trusting someone doesn’t mean that by extension, you trust the people they trust, whether or not they’re family.

If you trust your favourite beauty blogger who’s dating Joal, would you trust him?

If you trust DJ Jade Rasif, do you trust her dad?

Back to durians.

“You’re set to receive $$$ sent to you via cheque every year… Until 2068!”

That’s 50 years.

Wow. I’m invested in DBS stocks, which pays me dividends twice yearly and has been around since 1968, but even then DBS doesn’t make promises like guaranteed returns every year sent to you for the next 50 years!

Even the Singapore Savings Bonds, backed by our own government, makes no such guarantee for FIFTY years. Who knows what will happen in 50 years? Do you have a crystal ball?

She even tries to entice investors further by saying they can earn an “estimated SGD $44,000 PER SEEDLING”!

Oh my goodness. Pay $1,796 for a seedling and get back $44,000? Where do I sign up for this guaranteed investment?!

Apparently her followers are grateful to her and have made the investment. Folks, I hope you know what you’re doing.

Someone tell me: What has Instagram got to do with this durian investment? It is clear that the people behind this are trying to create FOMO (Fear Of Missing Out) by association fallacy, which is the illogical argument of irrelevant association which often appeals to emotion, suggesting that that qualities of one thing are inherently qualities of another.

To convince her followers that the investment is TOTALLY legitimate, she even shares photos of the plantation and the seedlings.

Rachell again emphasises small starting capital, low risk, long term returns and passive income – for the next 50 years.

The Contract

Some concerned readers were initially considering parking their investments with her, that is, until they saw my thoughts on the scheme on 19 April on my private Dayre.

These readers e-mailed me and requested that I study the contract and investment documents that they were sent. I highlight the worrying portions here:

RED FLAGS:



1. The contract makes the promise that the investor shall be paid a GUARANTEED RETURN.



2. You’re signing a contract with a Malaysian company and the contract will be governed under Malaysia law. This means that if something happens to your investment, you can’t fight your case out in the Singapore court.

3. Note that this guaranteed return, however, expires after FY 2023. That doesn’t seem to gel with what Rachell said on her Instagram about receiving a cheque every year for the next 50 years?

4. Take note of the costs liable to you after the year 2023 if anything happens to your durian seedling. Also, you sign the contract agreeing that you cannot hold the company liable for any losses or damages due to uncontrollable factors in the next 50 years.

My readers have asked if this is legal and allowable by the Monetary Authority of Singapore (MAS). The truth is, I don’t know, but I’d certainly love to hear from MAS if it is legal to market such an investment scheme here in Singapore, particularly when the Singapore entity isn’t even registered as an investment entity.

The last I checked the MAS Financial Institutions Directory, Mirach HP Management Pte Ltd is not even licensed to provide financial services.

5. The Singapore entity was only recently registered in March 2018, barely even a month ago.

Well, guess what? Since my original post broke on 19 April, the said influencer has taken to Instagram to defend herself by stating that the money doesn’t go to her account, and that there is a legit contract in place.

Look, even if there is a legitimate contract in place, that doesn’t mean your money is safe. If the company folds, your contract isn’t going to be worth the paper its printed on. Who will you go to for legal recourse? Your lawyer in Singapore? Wait, don’t forget that your original contract alone was governed by Malaysia law, so you need to fight your case there. Good luck with that!

The other part that really made me laugh was the fact that the influencer herself doesn’t seem to be able to know how to read. In my post telling people not to park their investment money with a blogger, I clearly referred to the influencer who told people to send money to her for her auto-forex trading investment scheme, not Rachell Tan.

But anyway, Rachell Tan makes it sound like she’s genuinely recommending a solid investment opportunity to her readers because there’s money to be made here, and she cares enough to share although she has nothing to gain from your investment!

If Rachell really has nothing to gain from this, why would she put in so much effort into replying each of her followers DMs, and WHY is she sending out emails using Mirach’s address?

I’ll leave you to judge.

With love,

Budget Babe

Budget Babe is an ordinary lady striving to achieve financial freedom in Singapore before the age of 45. She writes in order to empower fellow Singaporeans on taking charge of their own lives and finances, and to eventually break free from the competitive rat race.

DollarsAndSense Editor’s Note:

Investment scams that masquerade as legitimate investment opportunities are everywhere. Because they prey on human psychology, even smart people can fall prey. You can watch this social experiment DollarsAndSense conducted to see how easy to scam Singaporeans using the characteristics of real-life scams:

Read Also: Scam Checklist – 7 Ways To Tell If The “Investment” You Are Looking At Could Be A Scam