Singapore’s Web of Investment Scams: Mounting Debts Are Breaking Victims

An increasing number of scam victims in Singapore are finding themselves saddled with significant debts as they seek funds simply to make ends meet. According to the Credit Counselling Singapore (CCS), 106 individuals sought assistance last year, among them a 40-something expatriate, referred to as Vijay, who fell victim to an investment scam that left him with debts amounting to S$650,000 (approximately RM2.16 million).

Vijays ordeal began in July last year when he was lured into a fraudulent investment scheme. In an effort to cover the losses, he borrowed S$200,000 (around RM665,300) from friends and took out an additional S$450,000 (around RM1.5 million) in loans from banks. Even after selling his house in India, the proceeds were insufficient to settle his debts. For three months, he frequently found himself skipping meals due to financial constraints.

Through CCSs intervention, Vijay managed to renegotiate his bank loans, extending the repayment term from two years to five. He also slashed his monthly expenses to just S$1,000 (around RM3,327). Presently, half of his salary is allocated to debt repayment, and he has successfully cleared 90% of his obligations.

Another individual who sought CCS‘s help, a 40-year-old delivery worker known as Ali, fell prey to a job scam. Ali had met a woman online, who introduced herself as “Jana.” Their daily exchanges soon led to Jana requesting Ali’s assistance in transferring funds to various bank accounts under the guise of supporting her part-time work, with the promise of a 10% commission.

Initially, Ali used S$6,000 (approximately RM19,960) of his savings. However, the platform later claimed he needed to invest more to receive his earnings. Ali subsequently borrowed over S$25,000 (around RM83,168) from former colleagues, banks, and moneylenders. When no payments materialised, he realised he had been scammed and reported the matter to the police. Currently, he allocates S$500 (around RM1,663) from his S$2,500 (around RM8,317) monthly salary towards debt repayment.

Recent statistics from Singapores police underscore the scale of the problem. In 2023 alone, scam syndicates defrauded victims of S$1.1 billion (around RM3.66 billion), marking a record high.

Tan Hui Min, General Manager of Credit Counselling Singapore, told The Sunday Times that 33 scam victims sought help in the first quarter of 2024 alone. She projected that the number of cases this year could exceed 130, a sharp rise from the 106 recorded last year.

Tan highlighted that the majority of victims were ensnared by investment scams, often being misled into believing they needed to invest further to unlock both their principal and profits. As funds appeared only to flow inward without any withdrawals, victims were pressured into injecting even more money, resulting in overwhelming debts.

Counsellors at CCS work closely with victims to determine the amount they can feasibly repay each month. This process often includes advising them on cutting expenses and devising structured repayment plans to halt creditor harassment. However, for those unable to meet repayment obligations, declaring bankruptcy remains a last resort option.

Tan stressed that borrowing to repay debts is not a viable solution and cautioned that such practices merely exacerbate the financial burden rather than alleviating it.