Shun too good to be true schemes

NEWS reports have been highlighting the collapse of elaborate investment schemes resulting in investors losing millions of ringgit.

Many of those who fall victim are normally people who invest at a time when the investment scheme is ripe for collapse. Pioneer investors would normally receive returns as promised as they are often used to recruit others.

Even if reports are lodged with the authorities, in many cases it is near impossible to seek refunds, as all cash would have been siphoned off leaving investors lamenting over their misfortune.

Who should the victims blame? It is the victims who should bear responsibility for their own actions. If we have rights, we helm an equal amount, if not more, of responsibility. It is incumbent that we carry out due diligence before investing. Wouldn't a scheme which promises 15% to 20% returns a month smell fishy? Even when Ministry of Domestic Trade, Cooperatives and Consumerism has spearheaded efforts to educate consumers on the perils of investing in such schemes, it is unfortunate that new ones continue to sprout because of demand.

While the Malaysia Consumers Movement commends the ministry's consumer education efforts, it is disappointed with Bank Negara Malaysia for not doing more as financial regulators to curb such unscrupulous investment schemes. For example, news reports have highlighted a case where investors were duped of RM400 million by a gold investment company. Checks revealed that this company, incorporated in June 2012, was placed on Bank Negara's financial consumers watchlist in September the same year.

Why allow this company to continue operating when it has been placed on a watchlist five years ago? Why allow an investment fund to grow into millions before acting? Why freeze accounts only upon the collapse of such schemes? What happens to the properties or monies of investment funds once accounts of perpetrators are frozen? Bank Negara should undertake proactive action and ensure early action is taken.

To fellow consumers, when something is too good to be true, then it probably is. Please stay away from such fraudulent schemes to avoid unnecessary misery. Scammers will continue to exist if we support them. Self-protection is the best protection.

Darshan Singh Dhillon
President
Malaysia Consumers Movement