Malaysia is a ripe ground for investment scams to thrive. As a growing economy, we are open to various investment schemes and plans to build our financial portfolio. But we also hear of people who are cheated and scammed every day. This is partly due to the lack of knowledge in investing and desire to get rich quick.
Here are some ways you can avoid falling for investment scams.
1. Do Your Research
This should go come as common sense. Sadly, common sense is not all that common these days. When you are faced with a solicitor from any investment company, first, do your research. Get online and Google the company’s name and background. You can immediately find tell-tale signs if the company is not legit.
In Malaysia, investment schemes should be regulated either by Bank Negara or by the Securities Commission. You can always give the representative a call and ask if their investments are regulated. If they are not, it’s best to avoid them.
2. The “Now or Never” – The Big No No
One type of scam you need to look out for is the “Now or Never investment”. Investments do not have expiry dates. You can wait for a fund to be public listed and you can wait for the best time to invest in funds. But if someone tells you that this is the only chance you’ll get, be sure to question that reasoning.
Get as much details as you can on the reason why the potential investor has to start today. If it feels dodgy, you should clarify with Bank Negara.
3. Don’t Disclose Too Much
Before a sale is made, the agent or seller builds a close rapport with the customer. Sometimes, they can get a little too friendly. This could lead to you disclosing too much information. Particularly if you are talking with the agent for the first time on the phone, you want to be extra cautious.
Avoid making sales transactions over the phone. If the person asks for your credit card number, bank account number, or addresses, you should NOT give it to them. Scam agents can easily use your details to hack your online accounts or create spam emails etc.
4. There Are No Shortcuts
Investing takes time. There is no such thing as a 3-month investment plan. Investments take years to mature before you will start seeing returns. If anyone promises quick returns shorter than a period of 2 years, you must be extra careful.
Many of the get-rich-quick schemes often have a membership fee and employ a pyramid-style hierarchy. This means that people at the top get higher remuneration within the shortest time frame. Do be extra cautious of multi-level marketing scams as such.
Overall, it takes some basic knowledge and research to avoid a scam. In the event you are faced with an investment scammer, just casually mention that you will do a background check with the significant authorities before deciding on whether to invest. If this spooks them, you know that they may be scamming you.
This article was written by Lord Tan from CompareHero.my, a site dedicated to increasing financial literacy and helping you save time and money by comparing credit cards, personal loans, and broadband plans in Malaysia.