Enticing returns? Learn to spot signs of a scam

The call for people to invest in the luxurious SantaQuay Resorts was part of a government campaign to educate the public about investment scams.
The call for people to invest in the luxurious SantaQuay Resorts was part of a government campaign to educate the public about investment scams.PHOTO: MONETARY AUTHORITY OF SINGAPORE

For as little as $10,000, you can reap guaranteed annual returns of 24 per cent plus get back your capital, when you invest in luxurious SantaQuay Resorts, a freehold property investment opportunity in the Caribbean.

Touted as the "opportunity of a lifetime", the enticing advertisement on this two-year investment scheme appeared in the past two weeks on various social media platforms and newspapers, including The Sunday Times.

With hearts racing, retail investors checked out the website only to be pleasantly surprised that it was part of an innovative government campaign to educate the public about scams.

Visitors to the SantaQuayResorts.com.sg website were led to a message: "This is what an investment scam could look like, and you could have lost your money."

At the website, visitors were encouraged to find out more about "red flags", which are tell-tale signs in an investment scam, so as to protect themselves and their loved ones from scams.


The call for people to invest in the luxurious SantaQuay Resorts was part of a government campaign to educate the public about investment scams. PHOTO:
MONETARY AUTHORITY OF SINGAPORE

Spearheaded by the national financial education programme MoneySense and the Securities Investors Association Singapore (Sias), the campaign offers useful tips to retail investors.

Teacher Agnes Lim, 52, said she was attracted to the high annual returns and the beautiful pictures of SantaQuay Resorts. "The red flags are very useful. I will encourage my friends and family members to visit the website so as to pick up important tips," she said.

Retiree Sia Cheong Yew, 73, who visited the website out of curiosity, said: "It's a good one, if only to warn gullible folks that there are no easy and safe ways to get high returns."

He finds the approach useful but advised that scammers are usually more subtle, and have small print which people do not read.

Investors are encouraged by the scam campaign organisers to ask, check and confirm before committing to an investment.

Said MoneySense and Sias: "An informed investor is one who is able to identify the red flags of potential investment scams and take steps to perform checks on investment opportunities before he invests.

"Through first-hand experience of being enticed by an 'investment scam', we hope that investors will become more aware of, and be able to better identify, red flags of potential investment scams. Ultimately, we want to empower investors with the knowledge and skill sets to be able to critically assess if any investment opportunity may be 'too good to be true'."

One red flag is an investment that promises high returns to entice investors. Investors are advised that when presented with an investment opportunity that promises very attractive returns, it is important to verify how the investment scheme can generate such high profits. When in doubt of the investment strategy, do not invest.

Investors are also told that bona fide investment schemes generally do not offer commissions to investors for referrals.

SHARING TELL-TALE SIGNS

The red flags are very useful. I will encourage my friends and family members to visit the website so as to pick up important tips. ''

TEACHER AGNES LIM, on the campaign to teach people about investment scams.

In fact, such incentives are used by scammers to encourage existing customers to refer their friends and associates to the investment opportunity, so as to quickly enlarge their investor base.

One way of checking if the firm is regulated to provide financial services is through the Financial Institutions Directory, maintained by the Monetary Authority of Singapore (MAS).

The latter also maintains the Register of Representatives - a list of individuals who conduct activities regulated by MAS.

Another important list is the Investor Alert List, which is a list of persons unregulated by MAS who may have been wrongly perceived as being licensed or authorised by MAS.

Lorna Tan

A version of this article appeared in the print edition of The Sunday Times on April 16, 2017, with the headline 'Enticing returns? Learn to spot signs of a scam'. Print Edition | Subscribe