SCAM - Its Too Good To Be True

If something involving money sounds too good to be true, it probably is, said Securities Industry Dispute Resolution Centre (Sidrec) chief executive officer Sujatha Sekhar Naik.

“If it seems unbelievable, and too good a deal, it probably is. Very often those who lose their money to money scams would have had alarm bells going off in their head, but they chose to ignore it — until it is too late and the money is gone. It may be because of desperation due to mounting bills or debt or plain greed,” she said.

In light of recent reports on how the public placed their trust in shady companies and lost their hard-earned money, Sujatha said although such stories are common, it still does not stop people from falling prey to such scams.

“These scammers will first build trust. There will be community leaders like teachers who are part of the organisation and will testify that they have been making money. And yes, for the first year or 18 months there will be profits. But as soon as someone stops paying or someone takes out more, the scheme will collapse.”

“People must take ownership of their investments. A credible investment organisation or scheme will be registered under financial regulatory bodies like Bank Negara Malaysia or the Securities Commission Malaysia (SC). The information is available online, but if you do not have access to it, you can always call them up to find out if it is a legitimate fund before investing,” she said.

“It is your money, so take ownership of it. You should always be cautious and careful before trusting someone with your money. If you have invested in a licensed organisation, you are protected by law.”

“Any account opened or established must be under your own name. And you must have full control of the accounts. Any instructions to your broker or agent must be in black and white, via either WhatsApp or email. But make sure there is hard evidence on what you have said. Send the message out even if you have spoken over the phone,” Sujatha emphasised.

While Malaysians have grown to be more financially savvy and seek to invest their money for a myriad of reasons, from education for their children to retirement, Sujatha said one should know about the product they have chosen and the risks it carries.

“Do not let the complicated description put you off. Always learn the risks of the product before investing and also about the market conditions that influence your investment.”

Sidrec is an independent corporate body established for the settlement of monetary disputes between investors and Sidrec members who are capital markets services licence holders or are registered by SC.

“We provide free services to resolve any dispute for claims not exceeding RM250,000 that arises with our members which include banks, brokers, fund management companies, unit trust management companies, and private retirement scheme providers and distributors and members of the public,” she said.