Bogus investment have great image marketing packaging

September 28, 2012 15:16 PM

Be Aware Of “Bogus Investment”

By Zulkiple Ibrahim

Bogus investment companies and individuals are aware that people are always trying to get rich quick. Hence, they devise approaches to convince unsuspecting people to part with their hard earned money for investment packages which turn out to be scams, for the large part.

The following is the last of four articles on quick-get-rich scemes.

KUALA LUMPUR, Sept 28 (Bernama) — Abdul Rahman (not his real name) had just withdrawn his Employees Provident Fund (EPF) savings of close to RM500,000.

He was figuring out a way to utilise this money into making more money to last him during his retirement years.

One day, the former manager was introduced to a businessman who convinced him of investing in a scheme that promised a very handsome return, several times more than the amount of his investment.

Without checking or verifying the scheme, Abdul Rahman pumped several hundred thousands of Ringgits into the investment scheme.

Several months later, the businessman and company that offered the investment opportunity disappeared and Abdul Rahman lost all the money that he had invested.


According to consumer activist Gurmukh Singh, bogus investment executives are usually smartly dressed, drive luxury cars that are actually rented and operate from luxurious and posh offices.

“They may have no apparent connection to the investment business. This is why protecting your money against fraud involves at least three steps.

“Carefully check the background of the person and firm you would be dealing with. Take a close and cautious look at the investment offer itself. And continue to monitor any investment that you decide to make. However, not one of these precautions alone may be sufficient,” says Gurmukh.

Gurmukh points out that some swindlers deliberately seek out people that may have limited means or financial difficulties, figuring such persons may be easily receptive to a proposal that offers quick and large profits.

“What these bogus investment executives have in common is their ability to be convincing,” he says.


He says that the skills that make these swindlers successful are essentially the same skills that enable any good sales person to be successful.

“But swindlers do not have to make good on their promises. In the absence of this responsibility, they have no reluctance to promise whatever it takes to persuade you to part with your money”.

Among the promises that a swindler talks about is the profit that is large enough to make a potential victim interested and eager to invest in a scheme.

These bogus investment executives sound confident about the money an investor is going to make so that the investor will become confident enough to let go of his savings.

Their (bogus investment companies) message is that they are doing investors a favour by offering the investment opportunity.


Gurmukh says that among questions that can turn off investment swindlers are: “Where did you get my name? What risks are involved in the proposed investment?”

Other questions that can be asked are: “Can you send me a written explanation of your investment so I can consider it at my leisure? Would you mind explaining your investment proposal to some third party, such as my lawyer, accountant, investment advisor or banker?”

“Can you give me the names of your firm’s principals and officers? Can you provide references? Do you have any documents such as a prospectus or risk disclosure statement that you can provide?

“Are the investments that you are offering traded on a regulated exchange, such as a securities or futures exchange? What governmental or industry regulatory supervision is your firm subject to?”

“How long has your company been in business? What has your track record been? When and where can I meet with you or with another representative of your firm?

“Where, exactly, will my money be? How can I liquidate (sell the item I will be investing in) and when can I have my money back?”


Gurmukh advises that before a person makes an investment, it is wise to investigate the scheme.

“Asking some or even all of the (above) questions just suggested is not likely to produce straight answers from a crooked investment promoter but the very fact that you are asking such questions can be a turn-off,” he says.

He says that while separating a victim from his money is the swindler’s primary goal, the very last thing he wants the unsuspecting person to do is to check him out.

“Remember any money you hand over to an investment swindler is lost the moment you part with it,” adds Gurmukh.


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