Recently, investment scams have become more widespread in Malaysia. Some types of investment scams have also been on the rise amid the Covid-19 pandemic. With people staying home more because of movement controls, many investors have had time to enter the market. This has increased the number of new traders in the market looking for investment advice online, giving scammers more potential victims.
Many of these scams involve the scammer promising high returns to the would-be investor with little or no risk. The current low interest rate environment has also made it easier for investors who have unrealistically high expectations of returns to become scam victims.
The Securities Commission of Malaysia (SC) says these scams involve:
The Royal Malaysian Police (PDRM) has detected illegal online investment scams on social media platforms called ‘Like and Share’, ‘Queqiabao’, ‘Test Fight’, ’Zan Zan Le’ and ‘Isharefans’.
The victim sees advertisements on social media platforms and is given a phone number to contact via WhatsApp. The scammer provides a link for the victim to download a free e-wallet app and purchase a “package” from RM99 to RM9,999. The victim is required to give their phone number and bank account number. They are required to “like” and “share” social media posts to earn money for a certain number of likes and shares per day. To get the victim to part with their money, the scammer offers more tasks to earn more profits by selling investment “packages.” The money spent by the victim is sent to the scammer’s account. The profits earned by the victim will be shown on the victim’s account in the e-wallet app. The victim finds out they’ve been scammed when they try to withdraw their profits but are unable to.
Fake investment advice is given on online platforms, mostly through Facebook and WhatsApp.
Scammers and companies without a licence provide investment advice or carry out unlicensed capital market activities. They misuse and misrepresent the names of established online brokers such as Rakuten, public-listed companies, Bursa Malaysia or the SC’s name and logo. These scammers get their victims to invest their money, but the victims never get their money or profits back.
Scammers operate DAX to enable cryptocurrency trading among their victims. Although some DAX operators are licenced by the SC, others claim to be safe, regulated and have a licence from “Malaysian authorities” but aren’t actually authorised by the SC, confusing their victims.
The scammer pretends to sell cryptocurrency to the victim on a DAX. However, when the victim makes a profit, they can’t transfer the money out of their account.
The type of DAX involved in this scam includes Crypto ATMs. Crypto ATMs are machines that let investors buy and/or sell digital assets such as bitcoin and ethereum using cash, debit/credit cards or e-wallets. They are installed in several locations in Malaysia, but the SC has not authorised any entity to operate Crypto ATMs.
You can alert the SC or Bank Negara Malaysia (BNM) if you find suspicious websites, receive unsolicited phone calls, emails, messages and promotions on social media platforms offering investment advice and opportunities. Especially beware of those offering high returns with little or no risks!