Investment-related Scams
News of investment scams and frauds appear in the media from time to time, where promises of quick and lucrative profits are often used to lure unknowing individuals into traps set up by scammers.
Nonetheless, there are quite a few telling signs that investors should
pay extra attention to before rushing into investments that claim to provide high
returns or risk becoming the next victim of scam. Be sceptical
if investment opportunities come with any of the following features:
- Guaranteed high returns
- Sure-make-money investments
- Low or no risks
While investment scams come in various forms and set-ups, investors should be particularly alert to these types of scams and tactics that were recently reported:
- When approached by strangers on social media platforms, or received unsolicited messages on phone, text (via Whatsapp, Wechat etc., or email) or through any other digital forms, caution should be exercised when befriending such strangers, or to provide any personal detials;
- Discretion should be taken when stock or investment tips are given by persons befriended online, and investment transactions should not be made unless you have carried out your own due diligence on the companies/shares.
- There are scams or frauds that do not require you to send monies overseas or to transfer them into an actual bank account. Even if you are trading in stocks or products listed on reputable exchanges, investors should still conduct proper due diligence and to avoid complacency.
- Don’t think that the first few ‘stock tips’ were profitable so the callers or persons you befriended are therefore trustworthy, as this may be part of their strategy of winning you over.
- If an investment product promises high returns, they should also come with high risks. Investors should never believe claims of a guaranteed investment or trading strategy and succumb to promises of guaranteed returns.
- Investments should be carried out responsibly and within your own means.
One way for investors to identify if
an investment opportunity is genuine or dubious, is to keep an eye on advisories
from the Singapore Police Force.
For example, in May 2019, the SPF issued an advisory advising the public, that the Commercial Affairs Department (“CAD”) had received complaints relating to suspected “pump and dump” scams involving companies listed on the Hong Kong Stock Exchange:
A “pump and dump” scam is a form of stock market manipulation where fraudsters artificially inflate the price of a share (“pumping”), before selling their own shares once the price goes up (“dumping”). The fraudsters “pump” up the share price using a variety of methods, including spreading favourable but fake news about the company or creating false impression of trading activity in order to induce victims to trade in the company’s shares.
Victims were typically approached by scammers claiming to be from China or Hong Kong on social media platforms such as WeChat or LinkedIn. These scammers would then patiently work their way to gain the victims’ trust by texting them frequently on the pretext of friendship or networking purposes. Once trust had been established, the scammers would share that they possessed insider information on certain companies listed on the Hong Kong Stock Exchange. They would then encourage victims to buy these shares on the promise of quick and guaranteed profits.
Soon after the victims had bought their shares, the share prices of these companies would plunge sharply and the victims incur huge financial losses1.
Fraudulent & Impersonation Scams
Apart from investment scams, investors should also keep a lookout for alerts from the authorities, who issued notices of fraudulent phone and email scams, as the scammers had impersonated MAS, IRAS, banks or other financial institutions.
On 25 February 2020, the MAS mentioned in a notice that there were “fraudulent messages and calls to members of the public that impersonate MAS staff and request for personal or bank account information”2. Separately, in May 2020, as reported in the media, scammers sent out fake emails with the MAS name and logo, informing the victims to make payments to the scammers.
Precautions were sounded to members of the public to protect and not disclose their personal details, including information related to their Personal Identification Numbers (PINs), bank account (including internet banking details), credit card, social media account when they receive suspicious messages, calls or emails2. Similarly, security related credentials, such as login passwords or One-Time Passwords (OTPs) should also be revealed to anyone, including family members or friends, as there were cases where scammers managed to hijack into accounts to impersonate them, and to scam unsuspecting individuals.
The authorities noted that such “fraudulent calls may be received as regular phone calls or via applications such as ‘Viber’ or ‘WhatsApp’”2, and calls may be made from local or overseas numbers, where the scammers used Caller ID spoofing technology to display an MAS contact number. Such spam calls, messages or emails may even display the logo of MAS.
One way to identify if an incoming call from an unknown number originates from overseas is to note if there is a + prefix before the number. From 15 April 2020, the + prefix will be displayed for incoming calls from overseas. Hence, when you receive a call from someone not from your existing contacts, or if you are not waiting for any calls from overseas, you should refrain from picking up the call, or to exercise caution when taking the call.
In previously reported cases, recipients of scam calls are usually informed
that his or her bank accounts had been locked, suspended, or compromised. The caller
would also offer to help resolve the matter by requesting for bank account or internet
banking details such as the login ID and passwords. In other cases, scammers impersonated
bank staff in attempts to retrieve such information from victims. There were
also scammers who solicited for payments via fund transfers.
In summary, some of the precautions advised by MAS include:
a) Never disclose your internet/mobile banking or credit card details such as bank account user ID, passwords, Personal Identification Numbers (PINs) or One-Time Passwords (OTPs) to anyone through phone, email or SMS/messaging applications.
b) Do not authorise any suspicious authentication request. For example, do not respond to digital token authentication or OTP requests via phone calls if you did not initiate any internet/mobile banking transaction.
c) Be suspicious of unsolicited messages or calls purporting to be from MAS or banks2.
Where To Get Help?
As indicated in the advisories issued by the authorities, if you have any scams related information, you can call the Police hotline (1800-255-0000), or proceed to www.police.gov.sg/iwitness to provide such information.
For advice on scams, you can contact the anti-scam hotline at 1800-722-6688, or visit www.scamalert.sg for more information.
For advice related to phishing, visit the MoneySense website at http://www.moneysense.gov.sg/Understanding-Financial-Products/Banking-and-Cash/Things-to-Watch-Out-for/Phishing.aspx .
Reference:
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