Official-sounding letter turns out to be subscription scam

Company fined for duping more than 1,000 businesses which thought Acra sent the letter

A company sent out thousands of letters which looked like they were from a government agency, some bearing a Lion Head symbol.

Mailed in October and November 2013 to nearly 140,000 recipients, the letters were signed off by a "Deputy Director Information Services", without a signature.

In the letter, the company, called Company Register, asked recipients to verify their information in its database within one to two weeks, or else it would delete their details from the "Singaporean Company Register" database.

Nearly 22,000 recipients logged onto the company's website as instructed, but were then told that they had thereby subscribed to its services and must pay a $490 fee.

As a result, 1,056 businesses paid the data company $517,440 in all.

After the Accounting and Corporate Regulatory Authority (Acra) issued public alerts upon receiving many complaints and inquiries, Company Register changed its name to Data Register.

INTENTION TO MISLEAD

As regards the envelopes, it is significant that at the front, the word 'Singapore' was printed in red above 'Company Register', and the name of the company only appeared in small print at the back in the context of a return address.

DISTRICT JUDGE JASVENDER KAUR

Yesterday, the company was fined $200,000 - $400 for each of the 500 charges under the Companies Act that it had earlier pleaded guilty to. Another 604 similar charges were considered in sentencing.

Of the 1,104 charges in all, 552 each came under two sections of the Act. Under the law, a company has to state its name on all business letters. Its registration number must also appear on such letters.

In passing sentence, District Judge Jasvender Kaur dismissed the defence's claim that the company had been negligent, saying it had instead deliberately tried to mislead uninitiated business owners.

"In my judgment, the contents of the letters were plainly calculated to give a misleading impression that the letters originated from a government agency, i.e., Acra," she said.

Disclaimers on the company's website and the company's name on the envelopes "had a limited effect in disabusing the misleading impression", she said.

"As regards the envelopes, it is significant that at the front, the word 'Singapore' was printed in red above 'Company Register', and the name of the company only appeared in small print at the back in the context of a return address," added the judge.

The letters had also led to public disquiet, she noted. "It led to the diversion and wastage of public resources as Acra had to deal with phone, e-mail and counter queries and issue public announcements and news alerts."

The judge ordered the fine to be paid by June 17. The company could have been fined $1,000 per charge.

Earlier this year, Data Register offered a full refund to subscribers during a 10-day period.

Between November 2013 and April this year, Acra received an unprecedented 7,884 complaints and inquiries concerning Data Register; it incurred nearly $60,000 in costs for taking and making related calls to members of the public.

In a statement issued yesterday, the regulator of companies reminded businesses that "the statutory duty to file and provide business information... is owed only to Acra".

Although no other charges have been brought against Data Register, the police's Commercial Affairs Department is understood to be investigating the company.

A version of this article appeared in the print edition of The Straits Times on June 04, 2016, with the headline 'Official-sounding letter turns out to be subscription scam'. Print Edition | Subscribe