Before you tap ‘invest’, check if it’s a scam

A few taps on your phone can now open the door to investing, whether you are buying cryptocurrency or letting a robo-advisor manage a portfolio.

Digital tools can offer convenience, lower costs and allow people to start investing with smaller amounts. Yet, as access becomes easier, licensed financial planner Bryan Zeng reminds investors to take time to understand the risks.

“Having access to something easily does not mean it is safe,” Zeng told FMT Lifestyle.

For those exploring these platforms, Zeng suggests asking:

• “Do I understand what I am buying?”
• “Who makes the investment decisions?”
• “Who holds my assets?”

The answers help investors understand what their money is invested in, who decides what is bought or sold and whether their investment records can be verified directly with the institution holding their assets.

“A salesperson may give you a statement to say that you have this amount of money in these investments. But can you go to the company behind this salesperson and obtain the same statement that shows the same amount?” asked Zeng, a member of the Financial Planning Association of Malaysia.

Alongside understanding the investment, Zeng said it is important to check who is offering it.

Investors can verify whether the company and representative are authorised through the Securities Commission Malaysia’s (SC) Investment Checker.

Bank Negara Malaysia (BNM) lists licensed banks and insurers, while the Federation of Investment Managers Malaysia maintains a register of unit trust and private retirement scheme consultants.

Zeng also recommends checking the SC’s and BNM’s alert lists, as well as the Royal Malaysia Police’s Semak Mule portal for bank accounts linked to reported scams.

But these checks are only a starting point: the absence of a warning does not guarantee that an offer is genuine.

Business registration alone is no reassurance either, Zeng cautioned.

“Being incorporated with the Companies Commission of Malaysia only means that the business is registered. It does not mean that they are authorised to provide financial services,” explained Zeng, 48.

Even finding a company on an authorised list is only part of the check: scammers may use its name to promote a fictitious scheme.

Zeng, who is the CEO of FA Advisory, has seen his own firm impersonated this way. He recalled one particularly painful case: a retiree who contacted the firm lost almost his entire retirement fund to the scam.

To protect yourself, Zeng advised contacting the company using a number you find independently to verify the representative and offer. He also urged investors to confirm where their money goes – a request to transfer funds to an individual’s account is a red flag.

How scammers build trust

Beyond impersonating legitimate firms, scammers may use deepfake videos of prominent personalities to make investment offers appear credible, Zeng said.

Once people show interest, scammers often move conversations into WhatsApp or Telegram groups, where accomplices pose as successful investors, sharing fabricated returns and photographs of cash.

A salesperson then contacts the potential victim privately, promising extraordinary returns.

Then comes the countdown: invest now or miss out. “They don’t give you time to verify their claim. That is their strategy,” said Zeng.

Fake apps make the scam look convincing by displaying growing balances. Victims are encouraged to invest more but once a large sum is deposited, Zeng added, withdrawals are blocked.

When victims become suspicious and question this, scammers may cut off access to the app and become uncontactable.

Even seeking help can expose victims to another scam.

Zeng recalled advising a victim who found an advertisement offering legal help to recover his losses. At Zeng’s suggestion, he called the law firm directly and discovered that someone was impersonating a genuine lawyer who offered no such service.

If you suspect a scam, act immediately:

• Contact your bank’s fraud hotline to report any transfers and stop further transactions.
• Call the National Scam Response Centre at 997.
• Alert the SC if investments are involved.

“Making a police report with all the details you have is very important,” he emphasised. These include transfer receipts, recipient account details, advertisements, chat histories and contact information.

Investing may take only a few taps, but checking where your money is going deserves more time. An offer that pressures you to skip those checks is one you can afford to miss.

For financial guidance, watch the Financial Planning Association of Malaysia’s weekly ‘Money Mastery’ videos on Facebook or explore your spending habits through its Money Style Check quiz.

Subscribe to our newsletter and get news delivered to your mailbox.