It is very disheartening to read of yet another "investment" scheme gone sour ("Investors cry foul over tree investments gone wrong"; Feb 25).

This is not the first time the unsuspecting public has been cheated.

One effective way to avoid such problems is to educate the investing public to seriously consider the following questions before entrusting their hard-earned savings to strangers:

One, is the firm or investment scheme regulated by the Monetary Authority of Singapore? If not, what recourse is available if things turn sour? More often than not, investors would be unable to recover their money.

Two, is the firm enticing investors by promising attractive returns when bank lending rates are much lower in an environment of low interest rates? Why should such firms share their "guaranteed" profits with investors when they could probably obtain much cheaper loans and funds elsewhere?

Three, can investors rely on the creditworthiness of the firm and its owners and managers?

Four, would investors be further urged to invest ever-larger sums and for longer periods every time such investments mature?

As a long-term measure to eliminate such scams and frauds, the authorities should constantly educate the public about the very high risks associated with such schemes.

More stringent measures should be put in place to regulate risky businesses, such as land banking and real estate development, various types of agriculture and aqua-related farming, and investments in commodities, to prevent scams and frauds from being committed.

Harry Tong