Success Concepts chief executive officer Dr Joyce Chuah
WE have all heard or read horror stories of how individuals have lost thousands, if not millions, in hard-earned money to scammers.
Yet, it keeps happening again and again. It may have happened to someone you know personally. Even you, the person reading this, may have been a victim of a financial scam.
As Dr Joyce Chuah, chief executive officer of wealth and retirement planning consultancy Success Concepts, pointed out, scammers usually prey on the lure of high returns.
“Unfortunately, scammers worldwide have resorted to creative and new ways to lure unsuspecting victims, usually those with low financial literacy and acumen on money,” she told StarBiz.
In light of this, many individuals, even professionals, end up getting scammed when they are in dire financial need or facing a vulnerable personal situation, Chuah said.
To avoid being a victim to a scam, a good thing to do is to clarify the investment or business opportunity being offered, she added.
“Only decide to invest in products or business opportunities that you can comprehend. If you find it too hard to grasp or you cannot get any clarity elsewhere, it’s best to stay away from the opportunity,” Chuah said.
As emphasised earlier, financial scams also promise high fixed and guaranteed returns.
“Be wary of investments or businesses that promise abnormally high returns with little or no risk. High returns that cannot be logically explained should raise a red flag.
“For example, clear, straightforward answers must be provided on how the returns are made.
“Documents such as audited financial reports showing the profitability of the investment or business opportunity must be available.
“Replies such as ‘we cannot tell you until you invest with us’ clearly indicate a scam”, said Chuah.
If you’re sceptical about what’s being offered, then it certainly doesn’t hurt to do a background check, said Jeremy Tan of financial planning consultancy Excellentte Consultancy Sdn Bhd.
“When approached with a good financial investment proposition, do check the background of the company offering the investment scheme.
“One can check Bank Negara’s financial-alert listing for the latest update of unauthorised companies and their list of websites.
“Alternatively, you can peruse the Security Commission’s (SC) investors alert listing for the latest update of unauthorised entities and individuals too.”
Tan said individuals need to ensure that the companies and entities offering the investment proposition are under the purview of regulators such as Bank Negara, the SC or other government authorities.
“For any financial opportunities and propositions, do consult regulated professionals, whether it be brokers, investment agents, investment relationship managers, financial advisors, financial planners and/or trusted advisers.
“Always remember that for financial investments, risk is imminent, though it can be minimised.
“Let your own risk appetite be the guide. As they say, if it is too good to be true, then it is indeed too good to be true.”
Improving your financial literacy is another good way to reduce the risk of being scammed, said Chuah.
“Financial literacy can help you to ask pertinent questions and elevate your understanding of the financial offerings of an investment or business opportunity.
“Being financially literate allows you to develop asset-allocation rules and investment philosophies that you can turn to in times of doubt or reservation.”
Upon realising that you are the victim of a financial scam, then the immediate thing to do is report it to the authorities, said Chuah.
“File a police report and report the investment scam to regulatory bodies such as the SC, Bank Negara, the Domestic Trade and Consumer Affairs Ministry and the Malaysian Communications and Multimedia Commission.
“Notify your banks or online payment service if you have used them to transfer money to the scammer.
“Request that they secure your account and stop any future suspicious transfers or transactions that may not have gone through. Change your email and Internet banking passwords immediately and monitor your accounts more frequently.”
One could also resort to seeking legal recourse, added Chuah.
“Gather communication history and transactions relevant to the scam before you speak to a legal counsel.
“If you are eligible due to financial constraints, you can seek free legal aid services from the Legal Aid Bureau.”
If you are the victim of a financial scam, take it as a learning experience, said Chuah.
“Hard-earned money may have been lost and possibly unrecoverable, but the painful lesson can be a reminder not to fall prey to future scams.
“List down the scammer’s strategies and identify your vulnerabilities when you were scammed.
Additionally, spread the word and share the experience, so that others do not fall prey to something similar, said Chuah.
“Forewarn your family and friends. Post your experience on social media and online forums to warn others about the scam.”
