How to spot an investment scam

It's easy to fall for an investment scam but prevent yourself from falling victim with our guide!

During these challenging times, the number of scam victims goes up as people are inclined to seek an easy way out of financial difficulties. There are a few elements to an investment scam. When we saw the news of a clerk who lost RM715K due to an investment scam, we decided to write about it. Imagine you have worked so hard all your lives and lose the money you’ve wanted to spend to a scam. Not worth it.

  1. These investment scams would impersonate and use names close to a legitimate entity — e.g. Citibank International Investment Plan Worldwide or Berjaya Investment Bhd. If you didn’t know any better, you might have fallen for these household names.

    Securities Commission Malaysia (SC) updates its investor alert list regularly — the list consists of unauthorised websites, investment products, companies and individuals. So before you invest, make sure you do check the entity if it is legitimate or not.

  2. Another key element of an investment scam — guaranteed or exponential returns. When the rate of returns seems too good to be true, it probably is. There are only a few funds with extraordinary returns, such as Renaissance’s Medallion Fund — but this is only offered to current and former partners of the firm.

    The scammers would often influence victims by saying the investment scheme is once in a lifetime opportunity or has limited slots remaining. The idea of scarcity forces people to decide in a short amount of time. Do not fall for this. You can take your time to decide what to do with your money.

  3. The scammers would promise the returns in a short amount of time and honour their words. A classic trick to entice you to invest even more as you have now seen the crazy returns for yourself. Victims then go and break their piggy banks for these returns or go to the extend of taking personal loans.

  4. In recent years, assets such as gold or crypto have become more accessible, but many are still unaware. The victims would then rely on the schemes to have exposure in these “exotic” asset classes.

    Thankfully, there are plenty of options in the Malaysian market if you want to invest in the alternative assets market, such as cryptocurrency, gold, peer-to-peer, and equity crowdfunding. Here are the some of firms that the Securities Commission Malaysia has given licenses to operate locally:

    Cryptocurrency: Luno Malaysia, Tokenize, Sinegy

    Peer to Peer: Funding Societies, Fundaztic

    Equity Crowdfunding: pitchIN, Crowdo

Remember to always check the Securities Commission Malaysia website for the latest update on the recognised market operators.

For gold, you can try HelloGold (couldn’t find much info on it being regulated by SC or BNM, but it is Shariah Compliant) and a few of the Banks.

We’ve enclosed a guide for you to share with your friends and family. Hope you find this useful. You could prevent your loved ones from becoming a victim.


Meanwhile - if you want to stay informed, you can subscribe to our weekday newsletter covering local and global news.

Thank you.

Share The Coffee Break

PS - We are not sponsored by any of the entities mentioned in the above article. We are also not endorsing nor dismissing investment in any of those assets. Invest at your own risk.