Tontine Schemes
| About this Item |
Subjects | Gambling; Trade Practices |
Speakers | Lynch Mr Paul |
Business | Private Members Statements |
Page: 11974
Mr PAUL LYNCH (Liverpool) [5.15 p.m.]: I draw to the attention of the House a very serious situation in which several constituents of mine have found themselves. Those constituents include Seak Liv Ly, Chanthy Dos, and Sok Kheng Dos. They have been involved in a tontine—which some may call a pyramid-type scheme. It is also sometimes called a money agreement or a money scheme. My constituents now regard this as a fraudulent and corrupt venture, as a result of which they have lost many thousands of dollars. I raise the matter here to see if something can be done about it. It was reported to the Department of Fair Trading on 10 August this year.
My constituents first became involved in the tontine, or money agreement, in early 2003. Around January that year the organiser of the tontine came to the house of Ms Ly and Mrs Dos. The organiser discussed the tontine scheme, and my constituents agreed to participate in it. The theory of the scheme involved each of 36 people contributing $300 each month, although the initial contribution from each was actually to be $500. Each of those participating would have the opportunity to use the money collected, although they would pay interest on it if they did use it. The advantage of this was said to be that money would be more easily available than from a bank or other financial institution, and that profit could be made by way of the interest that would be paid on the money. Some people apparently had more than one of the 36 shares. Thus, while there were 36 shares, there were less than 36 actual participating individuals. I understand that 16 people might have actually paid money.
My three constituents have invested approximately $35,000 in the tontine. One other person I have been told of—although I have not yet spoken to—is said to have invested $65,000 in cash and jewellery in these sorts of schemes over three years. In this particular tontine, the mathematics suggest that about $130,000 is collected each year. That is of course quite a substantial sum of money. The monthly payments by my constituents continued until April this year. One of my constituents then approached the organiser for access to the money in accordance with the arrangement that she thought had been reached. The organiser refused to pay any money. In the words of my constituent, the organiser said they were not going to get any money and there was nothing they could do. The organiser did not have any money to pay them. The organiser warned my constituents not to report this to authorities and said her husband had a gun licence.
Quite obviously, my constituents have reported this matter. They went to both the police and the Department of Fair Trading in early August. I have also made some appropriate representations. Regrettably, not a lot seems to have happened so far in regard to official action. It is now becoming quite urgent. There have been some other, even more aggravating features. My constituents have discovered that this organiser has been doing this sort of thing for about 15 years. Apparently, many people have been damaged by this organiser, but she relies on preying upon people who are able to be intimidated or who do not know enough about the law and the legal structure to take action against her. My constituents believe that the organiser is specifically targeting people who cannot speak English and are less able to prosecute complaints against her. As one of my constituents said:
I also believe that there are a lot of people out there amongst Asian communities who suffer losses from her scheme. If she is not stopped soon, I fear there will be more people out there suffering losses like me.
The organiser, I am advised, is now selling her house. There is a fear that she is about to flee the jurisdiction. It is therefore becoming quite urgent that something be done about it. I would urge some immediate official action. I would in particular ask the Department of Fair Trading to look seriously at this matter. I understand the department has some powers that it can use, and that use of those powers can be expedited. I ask that that happen.