A content collaboration between Multiply and Bursa Malaysia

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:

• People representing themselves as dealing, managing and advising on investment without a licence from the SC
• People operating an investment platform, such as digital asset exchanges (DAX) without authorisation
• People issuing or offering securities without approval, authorisation or recognition
• People misusing and misrepresenting the SC’s name and logo

Common types of investment scams

• Get rich quick on social media scam

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’. 

How it works:
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.

• Clone firm scam

Fake investment advice is given on online platforms, mostly through Facebook and WhatsApp. 

How it works:
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.

• Unauthorised digital asset exchanges (DAX)

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.

How it works:
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.

What you need to know

• There is no such thing as a free meal. So, watch out if someone claims to offer unrealistically high returns (anything over 10% should sound alarm bells) for a ‘low’ investment.
• Victims who encounter fraud and money laundering on unlicensed platforms may not be able to take legal action because the scammers become difficult to find.
• Before deciding to invest, check information from established sources such as:
  • Semak Mule (by the Royal Malaysian Police)
  • Bank Negara Malaysia (BNM) Alert List
  • Security Commission (SC) 
  • Bursa Malaysia’s ‘Be an alert investor’ useful links
  • Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) 
  • You can also read Multiply’s guides on investing so you know what you should expect from investing
• Use the SC’s Investment Alert List to look out for scammers.
• Only trade with recognised market operators (RMOs) recognised by the SC. 
  • In the case of cryptocurrencies, Bank Negara Malaysia does not recognise cryptocurrency as legal tender, so there are no laws to protect cryptocurrency holders in Malaysia.
• Providing investment advice without a licence from the SC is an offence, whether they’re formal analyst reports or through social media platforms.
• Operating a DAX without authorisation from the SC is an offence in Malaysia.
  • Remember that there are only 3 RMOs licenced to operate DAX by the SC. They are Luno Malaysia Sdn Bhd, SINEGY Technologies (M) Sdn Bhd and Tokenize Technology (M) Sdn Bhd.

What can you do if you see something suspicious?
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!

If you suspect you’ve encountered an investment scam, you can contact the SC at aduan@seccom.com.my or 03-6204 8999.

You can also call BNM Fraud Alert at 1-300-88-5465 or email them at bnmtelelink@bnm.gov.my.