NSW Fair Trading Minister Virginia Judge today warned members of the Vietnamese community to be wary of hui banking schemes or risk losing their money.

A ‘hui scheme’, also known as a Tontine, Hawala or Fei Chein scheme, involves participants contributing money and then taking turns at receiving the consolidated funds, generally via a lottery system.

Ms Judge said a central element of every hui scheme is its isolation to a particular section of the community.

“The schemes are widespread in parts of Asia and are popular within the Vietnamese community,” she said.

“They are typically operated between friends and family, with the absence of any formal structure, reflecting the desire of participants to maintain confidentiality.”

Hui scheme loan arrangements are a form of underground banking and are often used when people do not have security or a savings history and are unable to obtain conventional finance.

These schemes are based on trust and members run the risk of losing thousands of dollars through funds being stolen.

These arrangements offer little protection for the victims of fraud with participants asked to take all the risk only to receive little if any reward.

Consumers who have lost any money in a hui scheme are urged to contact the NSW Police or the Australian Securities and Investments Commission.

Victims can bring civil action against those responsible and should report the matter to NSW Police for investigation of offences under The Crimes Act 1900.

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