Debt collection

Case Study #008: Dropshipping Scam
A client approached JMS Rogers regarding an investment that our client participated in.

Our client was introduced to someone seeking investments in his company who was in the import and export business.

Our client was told that the company had access to cheap goods from another country and it could be sold for higher prices in Singapore to achieve greater profit. And this profit was to be shared with the investors. The profits were about 10 to 20 percent on the dollar per transaction.

Our client trusted and invested the sum of SGD$75,000.

In the course of the next few months, our client did not receive any profit share. When the debtor was questioned by our client, he was told that no transactions were completed due to shipping complications.

Over time, our client became frustrated as there were other opportunities that he was missing out on due to his funds being stuck. He then requested to exit the investment, and that is where his nightmare began.

His calls and messages were ignored. He visited the office premises of the debtor, only to discover that it was a virtual office and that the debtor had also not paid for the virtual office.

He decided to engage JMS Rogers to see what could be done. Upon studying the case, it was discovered that the Investment Agreement had many flaws and most importantly, there was a personal guarantee made by the debtor in that agreement. Our client had not noticed it.

Using that information and also the flaws of the contract, and identifying the whereabouts of the debtor, JMS Rogers deployed its Asset Recovery Team to engage with the debtor to collect the payment.

The debtor initially brushed off the investment and said that our client should be aware that investments carry risk, and that the company was closing down due to non-performance and the investment was a business failure. The debtor also said that because it is a business failure, the losses should be borne by our client on his capital.

The team reminded the personal guarantee to the debtor, and that was the end of the negotiations as there was no escape from a personal guarantee.

Full restitution has been made by the debtor.

What we can learn from this:

1. Never invest just because the numbers sound good. Always dive deep into the details of the investment and identify all potential loopholes and pitfalls.

2. Ensure that contracts signed are vetted properly by lawyers to ensure that your interests are protected.

Debt collection