What is an Investment Scam?
Fraudulent scheme that promises high returns with little or no risk. These schemes are designed to deceive individuals into investing their money in non-existent or illegitimate ventures.
How to spot an Investment Scam? (Common Warning Signs)
- Too Good to Be True: Promises of high returns with little or no risk.
- High Pressure: Victims are rushed to “act fast” before the chance is gone.
- Name-Dropping: They mention famous people or big companies to seem legitimate.
- Focus on Recruitment: In Ponzi-like scams, you’re encouraged to bring in more investors.
- Unlicensed Companies: Investment firms operating without official approval or license.
- Unsolicited Offers: Sudden calls or messages promoting “exclusive” investment deals.
How to prevent Investment Scams?
- Only invest with licensed investment professionals.
- Do your research: Check both the investment offer and the person promoting it.
- Only buy investment products approved by the Securities Commission (SC) or Bank Negara Malaysia (BNM) to protect your rights if things go wrong.
- Verify and use these official sites to check for scams or unlicensed entities:
- SC Investor Alert List: www.sc.com.my/investor-alert-list
- BNM Alert List: www.bnm.gov.my/financial-consumer-alert-list
- Semak Mule: https://semakmule.rmp.gov.my/ — check if a bank account, company name, or phone number is linked to scams.
- If unsure, reach out to SC or BNM for verification.
Example of an Investment Scam Scenario:
Amir, 35, saw a Facebook advertisement about a "special investment" that promised high returns 15% every month with no risk. The page looked professional, and the person claimed to be a successful CEO. He was added to a WhatsApp group where an "advisor" told him to act fast because the offer was limited. Amir transferred RM5,000 to join and got back RM750 after a week. Happy with the result, he invested another RM15,000. Suddenly, the advisor disappeared. The Facebook page was gone. Amir lost all his money.
What Went Wrong:
- Amir believed a social media advertisement offering unrealistically high returns with no risk.
- He didn’t verify the company, the so-called CEO, or the investment platform.
- He trusted people in a WhatsApp group he didn’t know personally.
- He was pressured to act quickly without time to think or verify.
- He transferred money without confirming the legitimacy of the investment.
Lesson Learned:
- Be cautious of investment offers that promise high returns with little or no risk as they are often scams.
- Always verify the background of the company or individual before investing.
- Avoid making decisions under pressure, especially from strangers online.
- Real investments are never rushed or promoted through WhatsApp groups or fake social media pages.
- When in doubt, check with official financial authorities or trusted advisors.
