Find out how you can spot an investment scam and what you can do to avoid falling prey to one.
Key Takeaways
All investments carry risks. Always check before you invest!
Check for red flags. Be wary of opportunities that offer high returnsat little or no risk.
Check that the company and its representatives are regulated by the MonetaryAuthority of Singapore (MAS).
Check For Red Flags
Scammers use sophisticated tactics to get you to part with your money.There are red flags you can watch out for to steer clear of investmentscams.
High Returns At Low Or No Risk
Be wary when you encounter an investment opportunity that claims to guaranteeor protect your capital while promising high returns. The greater the promisedinvestment returns, the higher the risks should be. Many investment scamsuse lucrative promises to lure investors in
Pressure Tactics
"Limited time only! Invest before it sells out!"
"Special rates for first 50 investors. Don't miss out on this golden opportunity!"
"More than 2,000 people have invested - what are you waiting for?"
"Invest today and get extra 10% credit with many other benefits."
Limited offers, timed gifts or rebates, are common tactics in investmentscams to rush you into committing your money.
Make sure you fully understand what you are buying into instead of focusingon the carrots dangled.
Offer Of Commissions
Legitimate investment schemes generally do not offer commissions to investorsfor referrals.
Investment scams use such incentives to encourage existing customers tobring in their friends and associates to quickly enlarge their investorbase.
Fictitious Track Records
Investment scams may claim to have many years of experience, multipleaccolades or simply large investment profits to gain trust.
Some use testimonials from "satisfied customers" to shore up their credibility.
You should approach claims with healthy skepticism. Where possible, verifythe claims with an independent third party.
Check That The Entity Is Regulated
Some investment scams may even claim to be regulated by the relevant authoritiesto mislead you.
Confirm such claims by checking the resources on the Monetary Authorityof Singapore (MAS) website.
Financial Institutions Directory-a list of financial institutions regulated by MAS and the regulated activitiesthey are authorised to provide
Register of Representatives-a list of individuals who conduct activities regulated by MAS
Investor Alert List-a non-exhaustive list of persons unregulated by MAS who may have been wronglymisperceived as being licensed or authorised by MAS
Remember, dealing with an unregulated entity means giving up the safeguardsoffered under the laws administered by MAS.
Check On The Company's Background
Do not be too quick to believe everything you are told. Verify informationprovided by the entity about themselves or the investment opportunity,such as the background of representatives and the entity's track record.
It is also important to ask the entity as many questions as you need tofully understand the investment opportunity. If it is unable to answeror avoids answering any of your questions, be wary.
If you suspect that you are a victim of scam, please inform your bankand file a police report immediately.
Tell your family and friends about investment scams so that they do notfall prey to them.
Remember, if an investment sounds too good to be true, it probably is.
