An elderly woman has lost more than a large sum from her life savings after she invested her money in an overseas United Kingdom property on the advice of local property firm, Dennis Wee Group (DWG).
She is one of 50 investors in Singapore who have gotten mired in 2 failed hotel development projects near Manchester in the UK, which was reported in the news in 2015. The project had run into problems in the middle of 2015, trapping many of their life savings into “freehold” hotel rooms overseas that have now been transferred to the ownership of another company.
The case was first reported in The Edge Property: https://www.theedgeproperty.com.sg/content/are-high-returns-and-%E2%80%98fuss-free%E2%80%99-investments-too-good-be-true
2 years on, the issue has yet to be resolved. After receiving their 10% return for the first few months, many of the investors have not seen a single cent of return from their investment.
According to the whistleblower, who declined to be named, DWG had asked investors to sign a new contract offering new but more realistic terms. However, some investors have refused to sign the contract citing unfair terms.
Enhanced guidelines for property investment advertisements and investment seminars introduced by the Advertising Standards Authority of Singapore Council took effect from 12 August 2015. This was in response to an increase in advertisements, including those advertising overseas property investments promising astronomically high returns. However, these advertisements often lack sufficient warnings against financial, legal or regulatory risks.
The whistleblower admits that DWG has organized several sessions to speak with investors, but these talks have not been satisfactory.
So, how can investors avoid getting caught in risky investments? One lawyer says they should remember the old adage: If it sounds too good to be true, it probably is.