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What is Investment Package Scam?

2023-03-27 Brokersview

Investment Package scam is a common scam in Southeast Asia, especially in Malaysia recently. Most of the victims are novice investors with no experience.


Scammers often use social media to contact. Covered by fake identities, fraudsters are not easily to be discovered. And it is even more difficult to recover the defrauded funds.


How do Scammers Work?

Scammers first post investment advertisements on social media such as Instagram to attract victims.


Once the victims become interested in the ad and get in touch with the scammers, they will be invited into a chat group. The number of members in the group ranges from a few hundred to a thousand, while most of the people who actively discuss in the group are part of the scammer's group. Scammers send screenshots of earnings arrivals or photos of cash in the group to create the illusion that the victim will earn a lot of money by joining the investment.


When the victim comes to inquire about the investment, the scammer will pretend to be a staff of the investment company and recommend a packaged investment plan (Investment Package).


The conditions of the plan are very attractive: the deposit requirements are low, no trading experience is required, and the company will even arrange for a trader to trade on behalf of the client. All in all, the investor can earn money without doing anything else but depositing.


But real investment is never this easy.


It takes a few days or a few hours for the victim to receive a notification that the profit has arrived, and the profit rate is unbelievably high! People who have invested only a few hundred ringgit can often "earn" thousands or even tens of thousands of ringgit in profits.


Whether the investor wants to continue trading or withdrawal, the company will ask for fees for various reasons at this point. In addition to commissions, other excuses used by scammers include additional fees for excessive trading, and activation fees for certain account functions. Some scammers also pretend to be police officers or lawyers, claiming that the victim's account is suspected of illegal activity and must be investigated. And the account owner may be arrested or taken to court if he or she does not pay the required "attorney's fees" or "security".


Regardless of the excuses given by the scammers to demand fees, the bottom line is that the company will ask for the fees again and again, and the amount required will be higher and higher until the victim cannot afford to pay.


Upon receiving the first fee payment notice, some victims will immediately recognize the scam and quit; however, some victims may realize that it is a scam only after several payments have been made. At the same time, some people will be abandoned by the scammer because they cannot afford to pay the fees.


How to Avoid Falling for Such Scam?

· Do not easily believe in high profits or high returns.

· Fully understand the legal requirements that local financial investment entities must follow and check their regulatory status; choose a regulated broker to reduce the risks.

· Fully understand the sectors and instruments you want to invest in before making your investment decision.