Beware Investment Scams

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Before you commit to an investment, always ASK, CHECK and CONFIRM

ASK more questions

Knowing the tell-tale signs, such as promises of guaranteed high returns at very low risk, helps you spot investment scams.

ASK the company as many questions as you need to fully understand the investment opportunity.

If the company is unable to, or avoids answering any of your questions, be wary. Even if the company is able to provide answers, do not be too quick to believe everything you are told. Be sure to CHECK.

CHECK the Company Background

CHECK on the company, its owners, directors and management members, and the investment opportunity.

Doing so will help you to assess if the investment opportunity is genuine.

Examples:

  • Check if the information provided by the company about itself is true. For example, its address or track record (if any).
  • Check if the information (i.e. experience, qualifications) provided by the owners, directors and management members about themselves is true.
  • Check if there are any complaints or negative comments made about the company, its owners, directors and management members, and the investment opportunity, whether in the news or on online forums.

Ask someone you trust to help you with your checks if necessary.

CONFIRM the company and investment scheme with authority

Even if you do not find any information that suggests that the investment opportunity is dubious, you should still CONFIRM.

CONFIRM, before investing, the company’s and any representatives’ credentials by using available resources including the following:

  • Financial Institutions Directory – a list of persons regulated by MAS
  • Register of Representatives – a list of individuals who conduct activities regulated by MAS
  • Investor Alert List – a list of persons unregulated by MAS who
    may have been wrongly perceived as being licensed or
    authorised by MAS

Remember, if the investment opportunity sounds too good to be true, it probably is.

FOREX Courses

I have been self-learning Forex trading for quite some time, and felt that I could improve my skills by learning from experienced trainers. Recently, there are many Ads popping up on my Facebook about learning Forex. They seem very professional and promising, thus I decided to go for some of their showcase / previews. As I have been exposed to Forex for quite some time, it didn’t seem like any of those previews could convince me, BUT I see many Singaporeans rushing to sign up for those courses that cost THOUSANDS of dollars. The main reason they probably signed up is because, they were sold the ‘DREAM’ that Forex Trading can earn a lot of money, but what they don’t know is they can LOSE a lot of money too. Some trainers even promise ‘FREE’ trading money as a sponsorship program as long as they sign up their course. And I suspect most of these trainers are Introductory Brokers, meaning to say as long as their ‘students’ trade, regardless of winning or losing money, they make commissions off them which really disgusts me! Maybe here are some tips that may help the public that I use to determine if I can learn from a trainer. (1) Are they able to provide their LIVE trading results for at least the past 1 year? Why would I want to learn from someone who cannot even prove their good, or some even show me their results in EXCEL or PowerPoint. (2) Can we have freedom to choose our own Broker? If we are not, most likely they are just earning commission off us. (3) Do they have a physical training school? If they don’t HOW are we going to contact them or ask questions? I will be happy to share more!!

US Property Investment Scam

The seminars I attended aggressively positioned the XYZ investment as a low-risk investment, backed by real assets and there are checks and balances provided by the appointed XYZ Agent and the Trustee. The investment programme got investors to invest their monies to purchase foreclosed houses from banks in USA renovate and sell them at a profit. They assured investors at their seminars that they did their due diligence and even travelled to USA to check on the houses and validity of the programme and return with many marketing aids and testimonials promoting the investment scheme. The company also said that they are a Singapore registered company and being a registered company in Singapore, they won’t cheat investors.

Wine Scam

I received a telephone call around mid 2011 from a wine broker from a wine company . He had got my personal details from one of the seminars I attended. The agent introduced me to wine investment, promising good returns and showed me impressive marketing material, including media articles, auction results. past performances of wines. Between 2011 and 2013, the wine brokers promised to auction off the wines for a profit and continued to use tactics to entice and pressure me to buy more wines to enter the auctions. I was pressured to buy several wines to be auctioned at winery-sponsored auctions. Later on when contacting the wineries, they denied sponsoring any such auctions. The company was sold to a Dominican Republic national, Mr J* ****. We investors thought things would improve, but they got worse. We were given trading agreements that they would trade the wines. The wines were not traded. Some were told to top up money and switch to rum, they rum was not delivered. Later “Mr J** ****” the country and left us in the lurch.

Artwork Scam

Around mid 2012 I received a telephone call from an art broker. The broker showed me impressive marketing material, that caught my interest. The Director and Founder, Mr. A***** represented their company providing an end to end broker service and a rental program where artworks are rented to corporate companies for 12% and investors will get 6%. It was represented that investors could expect capital appreciation of about 12%-15% per annum I bought several artworks and started receiving rental income and was happy. However into the second year phone calls were not answered and emails got no response. I received an email that the company was undergoing restructuring. Some of us did not get the artworks although we paid for them. The rental income stopped and the company was shut down with no proper explanation, except financial difficulties. The artworks have dropped significantly in value, only a fraction of what was paid for. Some persisted and tried to contact the overseas office by sending lawyer’s letters (eg they would be charged exorbitant storage fees for their remaining artworks; threatened to be sued for libel and harassment, and legal costs) but was informed that the overseas office was not affiliated to the Singapore office.

I learnt that if something is too good to be true it probably is. The brokers are very smooth before they get your money, after they get your money it is a totally different story. It is important to do detailed background checks and reviews of the company and their directors. I have been badly burnt and hope that my nightmare experience can be a cautionary story to others.

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