045 Beware of scams

"The lesson here is that if an offer is too good to be true, it often is exactly that." That's the advice given by Federal CCID director Comm Datuk Seri Mortadza Nazarene.

Yes, there is no such thing as easy money. All business has its strengths and weaknesses; has risks of poor sales etc. The profit of a genuine business is maybe 10%~20% of it total sales, and it has to control spending so wisely to achieve that. This we can see from the annual reports of listing companies.

Recently, it was reported the scams of "World Richest Man" and "Surewin2u" were busted. All of them promised high returns. We read in newspaper some investors lost ten or hundred thousands ringgit.

So, when something is offered to us at an irresistible rate, let's be alert. Let's not be too tempted to try it. Let's cool down and think it over.To safeguard our hard earned money, let's not make rush decision.

It makes more sense to me if an investment has decent returns; has some positive and negative returns; needs time to grow; approved by authorities (e.g. BNM, SC etc); marketed by authorised or licensed agents.

What should we do if we have doubts?

Bank Negara Malaysia maintain a webpage (http://www.bnm.gov.my/index.php?ch=en_financialconsumeralert&lang=en) to educate general public on the unauthorised or unapproved investment schemes. BNM also maintain an updated list of websites or companies on alert (http://www.bnm.gov.my/documents/2014/20141231_FCA_EN.pdf).

Therefore, the best thing we should do is to check the list whether the investment is inside the list. If it is, we should stay clear. If not, we can still call or email to BNM to clarify a scheme.

If the investment is genuine, an intelligent investor will still need to read the available prospectus, proposal, fact sheet, disclosure documents, risk profiling etc to know if the products suits us. Judge does the product complement our existing financial assets to achieve our goals? Be prepared if the investment returns does not meet its designed expectations.

Lastly, the product with "highest returns at low / no risks" has not arrived in this world. If such product exists, I believe the rich would be the first to get it quietly. Talk to your trusted planner before you decide to invest.

What's your method of preventing yourself falling into scams?