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Financial scams are currently on the rise in Singapore, which leaves more and more people vulnerable to devastating financial losses. According to The Straits Times, in the first half of 2020 alone, up to $82 million were lost from Singapore’s most ubiquitous scams.
Scammers have also become more aggressive, and more sophisticated in their methods, in light of the uncertainty and precariousness of the COVID-19 pandemic. And one of the most common kinds of scam to plague Singaporeans today is the investment scam, which comes in various iterations.
Scammers target unsuspecting individuals who might have a genuine interest in investing, but do not yet possess enough financial literacy or tech-savviness to know better.
These victims may believe they’re investing legitimately in companies, institutions, bonds, shares, foreign exchange, or cryptocurrency. It’s only when it’s too late—i.e., when they’ve lost their money or gotten implicated in unlawful activity—do they realize it’s a scam.
Given the widespread proliferation of such investment scams, Singaporeans need to be more vigilant about where and how they invest their money.
Read on below for more information and avoid falling prey to an investment scam Singapore residents typically encounter.
What Are the Most Common Types of Scams in Singapore Today?
Four types of investment scam are alarmingly common in Singapore: social media investment scams, binary option trading scams, online investment platform scams, and cryptocurrency scams. Here’s a brief overview of each one of them.
1. Social Media Investment Scams
In the past decades, investment scammers would use telephones or mobile phones to cold-call potential victims. But today, they more commonly use the cloak of social media to reach out.
Scammers may message victims on Facebook, WhatsApp, or other mobile platforms and purport to represent legitimate financial companies. They’ll advertise investment opportunities, but say it’s only possible if the investor pledges data from their National Registration Identity Card (NRIC), passport, and the like.
Thus, prospective investors must be extra wary of so-called stockbrokers or financial company employees who contact them out of nowhere. Even if it seems they are being contacted by someone legitimate, it’s so much harder to tell whether a clone account or impostor account is being used.
2. Binary Option Trading Scams
The second common type of scam has to do with binary option trading, otherwise known as all-or-nothing or cash-or-nothing investment. This type of investment is highly risky, unpredictable, and very prone to fraud.
Insidiously enough, scammers highlight the simplicity and quick, high returns of binary option trading and use big names, such as those of successful business magnates, to push their agenda. It should be noted that many platforms anchored binary trading options are actually a sham, and should therefore be avoided by Singaporeans.
3. Online Investment Platform Scams
Another tactic that scammers often resort to is advertising a particular platform on which to do investing activity. They’ll say the platform is easy to use and act as if it’s the only platform that can promise them solid returns.
Their modus is to send a link or pressure the potential victim to sign up for an account. It will then be impossible for victims to recover the funds they funnelled into the platform, or through the bank accounts they deposited into.
One of Singapore’s most noteworthy investment scam cases of 2020, in which $74,000 was lost by the victim, transpired through this modus. Thus, people are enjoined to be extra careful about being lured hook, line, and sinker into one of these suspicious platforms.
4. Cryptocurrency Scams
There are also a number of scams involving prominent cryptocurrencies like Bitcoin and Ethereum. Investing in these cryptocurrencies may seem appealing because of the unregulated trading possibilities and cryptocurrency’s secure infrastructure.
Scammers may woo victims with these qualities without sharing the risks that come with investing in cryptocurrency. The so-called investment activity then requires the victim to buy cryptocurrency first, and then transfer it to someone else.
It’s also common for scammers to execute pump-and-dump cryptocurrency buying schemes, or to sell cryptocurrency on the web via illicit initial coin offerings, or ICOs. Singaporeans shouldn’t be too dazzled by the idea of cryptocurrency and must be critical about investment opportunities that involve these.
How to Identify and Avoid Investment Scams
It is admittedly harder than before for the average Singaporean to differentiate between legitimate investment opportunities and investment scams. Scammers are getting very good at mimicking legitimate methods or invoking the names of legitimate entities—even those linked to the Singaporean government.
But there are a few things you can do to identify and steer clear of investment scams. Here are some practical tips.
— Be wary of any stockbroker or financial company employee who flatters you, dumps information on you, and pressures you to make decisions very quickly. It’s also a red flag if they’re unwilling to answer questions, given that investment is something that requires a lot of research and critical thought.
— Investment always involves risk. If the opportunity seems too good to be true—i.e., it offers very high returns with very low risk—it most probably is.
— Never trust any person or platform that requires immediate access to sensitive details from you, like your banking account or credit card info. It’s all the more suspicious if they push you to make several new accounts or transact with various other third parties.
— Never agree to transact with an entity that’s unregulated by the Monetary Authority of Singapore (MAS). Do your research and find out if the entity someone is claiming to represent is actually flagged on MAS’s Investor Alert List.
— Follow the local news, or subscribe to a website like the National Crime Prevention Council’s ScamAlert, to stay up-to-date. Doing so will keep you aware of potential scamming activities and keep you and your loved ones safer from them.
There’s no such thing as a get-rich-quick hack when it comes to legitimate investment activity. Always be aware of the time, money, and risk that investments take, and be careful about whom you entrust your hard-earned money.
Share this information with your family, friends, and contacts in Singapore to better protect everyone from investment scams!
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