Don't be caught out by investment scams

Anti deception
Investment scams

Do you believe in "zero risk, high return" investments? If so, you could easily fall into an investment scam.

There are many kinds of investment scams, such as Loco London gold fraud, bitcoin fraud, pyramid and Ponzi schemes. No matter the method, the idea is to offer a quick, high return to tempt you into making a bad decision.

Virtual assets

Virtual assets deals like bitcoins are risky. There may be website security problems and if the site is hacked you will lose your bitcoins.

Fraudsters also use virtual assets opportunities as bait. For example, they offer bitcoin mining contracts that are, at first, profitable. But after putting in extra money, or getting friends to take part, the trading platform is shut down. Then, you will lose both your money and bitcoins.

Click here for the latest on virtual assets.

Loco London gold fraud

Conmen often cold-call and persuade you to invest in schemes with names such as Loco London gold, a Renminbi kilobar gold contract, paper gold, gold bar, a 99 tael gold contract or HKD kilo gold contract, and so on …

They may even offer a gift if you open an account. Once you have done so, they will talk you into signing a document authorising someone to trade on behalf of you. Then, they will make "investments" without telling you, until all your money has gone.

Pyramid schemes

It uses auction websites or multi-level marketing plans to catch out victims. The conmen encourage people to pay out lots of money to buy goods, and get others to take part in the scheme, so as to get commission. Most of the money made comes from new membership fees. The conmen are not worried about sales, and the goods are non-refundable or the refund terms are tough. If you don’t have enough money to join the scheme, the fraudsters may try to get you to take out loans.

Ponzi schemes

It offers high returns as bait. Fraudsters often organise investment seminars and once you are signed up you may make some small profits. This is to encourage greater investment, but you will eventually lose all your money.

Investment scams change from time to time to catch out new victims. They count on people being greedy. The following advice will help you avoid getting caught:

  • Beware of investment plans offering low risks, and returns that are too good to be true.
  • Don’t blindly accept investment opportunities from friends or relatives. They might not know themselves they are being duped.
  • Don’t make investment decisions based just on information from the internet. Fraudsters often send online newsletters, go on forums and spread false information to trick people.
  • Take time to think. Fraudsters will pressure you into making quick decisions. Before you make an investment you should be calm, consider all the facts and the risks.
  • If the investment is complicated ask professionals for advice.

Anti-Deception Coordination Centre