How To Inform If Your Funding Is A Rip-off, Cash Information

Investment fraud is increasing. This will avoid becoming a victim and losing the savings of your life.

Last year, at least $ 69.5 million was lost to fraudsters who engaged in over 1,100 investment frauds in Singapore. This equates to an average loss of more than $ 63,000 per victim.

This finding is especially astonishing when you consider that Singaporeans are generally known to be cautious and even shy. So what happened How did these scammers get away with cheating so many people out of so much money?

More importantly, how can you protect yourself from such scams? How do you find out if the investment you are being offered is legitimate or just a scam?

What has happened in recent investment fraud cases?

Scammers masquerading as interested applicants and potential friends find their way into the victim’s DMs via dating apps (e.g. Tinder) and social media. After an initial background check, disguised as harmless jokes or flirtations that can last days or weeks, the conversation shifts to investing.

When they followed the scammers’ suggestions, the victims were soon rewarded with a small payout. The victims were encouraged to pump in more money, a notion they did not oppose as they believed the system was legitimate.

Until the scammer disappeared along with all of their hard earned cash. Or when the police came and told them the truth.

Lessons to be learned from last year’s investment scams

1. Scammers are becoming more insidious

The popularity of social networks has normalized chatting with strangers and making friends online, but that doesn’t mean there is no danger.

Police said that many victims in the last year’s cases have been targeted via dating apps and social networks, showing that scammers are increasingly targeting these platforms.

All the more reason to remain vigilant when dealing with unwanted contacts over the Internet.

2. Always do your research first

The victims of fraud last year were trained to “invest” and instructed to download and install unknown apps by scammers posing as finance professionals.

In general, don’t believe what someone says on the internet, fantasy land where everyone is five years younger and 10 kg lighter.

You should always check the background of anyone trying to get you to take any particular action – that’s a simple Google search. Although more dedicated scammers or larger syndicates can carefully curate social media channels and sites, add a pinch of salt to your search results.

And that applies twice to software or apps. Before installing any unknown software, make sure you know exactly what it is doing. And don’t link your bank account or deposit funds through an app you’ve never heard of.

Scanning software or apps with reputable antivirus software can also alert you to possible damage.

3. Know where your money is going

In the investment scams last year, victims were told to transfer money to offshore bank accounts, mostly located in Hong Kong or China.

The problem is that once money leaves your account it can be difficult to come back. This is even more true if your funds have crossed international borders and jurisdictions.

When considering investing, make sure you know exactly where your money is going. Be sure to check the details of all bank accounts that have been made available to you for payment. And when prompted to deposit funds into offshore bank accounts, stop and think twice.

This is how you determine if your investment is real business

1. Show me the basics!

Just as you can’t create something out of nothing, legitimate investments are based on certain securities.

Since different securities have different characteristics, the investments based on them also have their own fundamental data.

For example:

2. Explain to me like I am 10

Many of the most popular investment products are easy to understand. However, there are some highly complex products that are difficult for even professionals to understand and explain.

Take, for example, the subprime crisis in America that led to the global financial crisis of 2008. Sure, greed was a major contributor, but the stocks banks, hedge funds and investment firms traded in had become so complex that no one could see the impending crisis.

If neither you nor your broker can explain the investment in the way a 10 year old can understand, it might be a good idea to steer clear and instead invest in something more traditional. After all, there’s a reason stocks, funds, and bonds are still some of the most popular investments today.

3. Is it too good to be true?

A simple but useful rule of thumb: if it sounds too good to be true, it usually is.

Fancy claims and suspiciously high returns are always red flags, especially if they are not based on a logical explanation.

If you are unsure of what counts as “too high”, see historical performance of similar products to get a feel for realistic returns. It can also be helpful to consider that the S&P 500 has posted an average annual return of 6.8 percent, adjusted for inflation, over the past 50 years.

Another case to be suspicious of is missing out on important details. For example, there is no mention of how long you can get those impressive sounding 15 percent returns (if they say “forever,” go away).

Or when little or no talk is given about the risks underlying your investment or how it could fail for you.

If by the end of the presentation you feel like you haven’t learned anything concrete – as is often the case with MLM sessions – there’s a good chance you’re being sold sandcastles built on the air.

4. Check the MAS Investor Alert List

Bald-faced liars have an obligation to bend the truth, so just asking if the facility or representing company has been approved by the MAS may not be enough.

To make sure of this, do a quick check against the Investor Alert List, which lists companies and businesses that have been found to be incorrectly perceived as licensed or regulated.

Note that this list is not exhaustive. So if you don’t appear in the list, it doesn’t automatically mean that the entity is 100 percent legitimate.

5. “Limited Time Only” and other printing tactics

And then there are good old-fashioned printing tactics. These come in a virtually unlimited number of shapes and forms, but they try to use psychology to get you addicted.

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For example, some tactics artificially limit your investment opportunities, while others further increase the barrier to entry.

You may also be prevented from walking until you sign up or forced to endure hours of marathon presentations until you give in.

Online or phone fraud could potentially lead to you transferring your funds or handing over login details before your account is locked forever.

If you are under pressure to invest or take action, detach yourself immediately so that you have time to do your research or think about it.

A legitimate investment will always welcome you if you are good and ready.

This article was first published on SingSaver.com.sg.