Over the last few weeks, I have realized that the Facebook is often used to lure innocent and unsuspecting users to participate in scams. I stumbled upon a few live “scam” as it is unfolding and ongoing. More and more people can become victims and I see many such scammers attempting to lure unsuspecting individuals.
There are a few steps used by the scammers to recruit a scam victim. Firstly, an advertisement is made on Facebook asking users if they are keen in investing? Or are willing to learn investing for free. If yes, you are requested to click a link that will take you to a WhatsApp group and a Telegram group. Clicking the link also may give scammers access to your phone.
Upon giving your consent, you will be taken to a “WhatsApp C1ahat” that is managed by a person. At this stage "Facebook" will caution you that you are using and application outside it. English names such as Haley is preferred. This person will ask you seemingly random question. They will ask questions about the following:
- How long have you been investing ?
- Are you profitable in your investing activity?
- What are the returns are you earning?
- Do you want to earn a higher return such a 100 percent a year?
- How much money have you invested and how big is your trading capital?
- Can you share you existing share portfolio for us to advice you on your portfolio?
- Can you share your investment portfolio for us to advice if the stocks you have have potential?
The participant unsuspectingly has revealed a lot of personal and confidential information to the scammers and given access to his hand phone. If you were to answer the questions honestly, the know how much you are worth and what amount you can “invest” with them. Upon answering this the person is transferred to another account purportedly that of an assistant to continue the learning process. In the mean-time, the participant will receive market review and trading education that is of high standards and probably written by a professional for as part of the services for free.
Secondly, the assistant will make an appeal for you to support the Guru in a competition that offers a very high cash prize if the guru receives the highest number of votes. The Guru promises everyone a fair share of the prize money if he wins. The prize money is indicated as millions of USD and the right to manage money amounting to USD500 million. You will be told to cast your vote to make a difference and appealed to support the Guru. You are even asked to vote every six hours. It is my suspicion that every time you vote bits of an illegal program are also downloaded into you phone. In return for your votes you are told you stand a chance to win cash and others such as an Iphone 15, as appreciation for your kind support. To pat the cash prize, you have to provide your bank account number. This is also a confidential information that is easily obtained by the scammers.
Thirdly, a few of the participants or nominees will “worship” and praise the Guru on how their life and investment fortunes have changed after learning from the guru. Pictures of where they are dining or spending their weekends are shared too. They are people planted by the scammers themselves and are tacit influencer's employed by the scammers. As this stage, the Guru will talk about gains he made during off market hours and the gains are high numbers exceeding 50 percent. This will be followed by a request for the audience to type “Want to learn”. If the number of requests are good than the Guru will share his secret. During his sharing, he will add that such gains are open to the institutional account holders. If you are interested in learning about it, the participant is requested to direct message to the Guru’s assistant.
Fourthly, the assistant will then send a link to open an online account that is based in a foreign country based on your interest. You will be requested to transfer your funds, with the suggestion “the bigger the amount the bigger the gains” to that account in a foreign country. You are told to tell your bank to state “the purpose” as “purchase of credit” in the bank’s transfer instructions. I did a background check of the Company and it is registered as a Telecommunications Company and is not in the business of investing. The purpose stated does not arouse and suspicions with the banks. All dealings are done only via online. Transfer forms are shared in the group to convince others that a lot of people are participating and making huge gains. So called investors, who have joined celebrate their winnings and share the wire transfer instructions, some as large as RM300,000. Those on the sidelines and are desperate jump onto the bandwagon as to them this is a good opportunity not to be missed. The Guru's assistant will at the same time persuade others to join in or face the threat of being exluded from the “WhatsApp Chat”. Updates such as “Starting today shares will only be given away to friends who join our organisation. Friends who have not joined can contact my assistant ”name and phone number".
I did not proceed beyond this point as I was almost certain that this is a “scam” in the works.
The reasons are as follows:
- the scheme is not approved by the Securities Commissions of Malaysia. Any investment scheme that are offered to citizens must be approved by the Securities Commission;
- I realised that personal information such as the investment portfolio, bank account number was collected without the signing of the PDPA or casually. The participants were induced with prize money and gifts that are expensive to share this informations. The excuse if you want your winnings we need your account number;
- the gains shown were excessive and unrealistic; The gains are in the region of 25 percent to 50 percent per day.
- the reason for transfer to be stated as for purchase of credit and not as investments
- I checked if the competition that the Guru is participating is real and the " internet"search returned a message that “the page has been taken down”;
- to give advise under the Malaysian Laws. any individual needs to hold an Investment Advisors License to be able to provide investment advice. There was no evidence of that;
- the funds are to be transferred to a foreign country and all account openings are to be done on-line with no KYC and AMLA checks done"; and
- a search with the SSM returned the Company as a Telecommunications Industy Player.
As the days went by more and more advertisement of this nature was posted on my Facebook page. They all operated under a similar fashion but had different underlying assets. The assets included cryptocurrency and shares. Judging from it the scam is popular and is copied by others who think there is demand for such services and can scam.
It is my, belief that there are many unsuspecting people who can become victims of scammers. What has changed then and now in scamming is that scammers today take to trouble to recruit the victim with trust building processes employing education, engagement, offering advice and the willingly open an account to deposit their money and to lose it. This scam is life and on-going at present. Investors or public are advised to use the above checks to determine if the services provided are legally appopriate before getting cheated.
Sivanesan Muthusamy is a Financial Markets Professional, Fintech and Startup Roll Out Strategist. He holds a Master's in Economics (Monetary Policy - Term Structure Analytics) and a degree in Economics (Hons.) Analytical Economics from the University of Malaya. His interests are in various fields and current issues. He is a strong believer in Malaysia and its potential.
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