SC: Increase in investment scams during pandemic

The SC has received 370 queries and complaints on illegal investment schemes compared to 317 for the whole of last year

by FARA AISYAH / pic by BERNAMA

INVESTMENT scams, including schemes involving fake companies, have been on the rise amid the Covid-19 pandemic, according to the Securities Commission Malaysia (SC).

SC chairman Datuk Syed Zaid Albar (picture) said investors’ vulnerability to scams might be caused in part by their unrealistic expectations of returns from investments.

“Up to the end of September this year, the SC has received 370 queries and complaints on illegal investment schemes compared to 317 for the whole of last year,” Syed Zaid said at the Virtual InvestSmart Fest 2020 (ISF 2020) last week.

He said a survey conducted by the SC earlier this year showed that a majority of investors in Malaysia have an unrealistic expectation of a 24% to 30% return per annum on their investments.

Syed Zaid said this search for yield in the current low-interest-rate environment has made investors more vulnerable. He said there has been a rise of “clone firm scams” of late, where the fraudster would impersonate a legitimately licensed entity to dupe investors into believing that they are investing with a legitimate entity.

SC’s findings revealed that most of these scams are commonly carried out via social media platforms, with WhatsApp and Facebook being the most prevalent channels.

“I would like to advise investors to always verify the individual’s and/or entity’s status with the SC before investing their monies in any investment schemes,” Syed Zaid said.

Given the rapid increase of illegal investment postings, the SC has recently set up an internal task force that would focus specifically on investigating and taking enforcement action against the perpetrators.

The SC has also urged investors to play their part by coming forward to provide information to the authority if they have been approached by any persons offering these schemes.

The survey by the regulator also showed that Malaysians are “late-starters” when it comes to planning for their retirement, often opting to begin planning when they are aged 44 years and above.

The SC said it is vital for all Malaysians to learn financial management and start saving and investing early to take charge of their finances.

The seventh instalment of the ISF aims to equip investors with the fundamentals in making sound investment decisions, showcasing over 35 virtual exhibitors comprised of capital market intermediaries, associations, regulators and equity crowdfunding, peer-to-peer financing and digital assets market operators.

SC’s partners for this year’s ISF include Bursa Malaysia Bhd, Financial Planning Association of Malaysia and Malaysian Financial Planning Council.

Syed Zaid said the ISF is an opportunity for Malaysians to learn how to achieve financial wellbeing and raise their awareness on the proliferation of scams.