How to Identify and Avoid Online Investment Scams in Singapore

Even though Singapore is known for being one of the safest cities in the world, it doesn’t mean that it’s free from crime. According to the Singapore Police Force (SPF), scams in Singapore hit a record high in 2023, with over 46,000 cases reported. This is nearly a 50% jump from the reported scam cases in 2022, and it has caused victims to lose a total of SGD 651.8 million. For years, Singapore has been a prime target for fraudsters due to the nation’s relative affluence and high internet penetration rate.

To protect its citizens from the risk of scams, the country’s government is taking bold and decisive moves to foster a safe and trusted online environment. For instance, in 2022, the SPF established the Anti-Scam Command (ASCom), which is designed to disrupt scammers’ operations and help citizens strengthen their sense-making capabilities with the use of technology. The Ministry of Communications and Information (MCI)—now known as the Ministry of Digital Development and Information—has also enhanced its partnership with industry players to design new security features to reduce the risk of malware-enabled scams in Singapore. 

These strategies, however, can only do so much to protect people from online investment scams. Citizens also need to do their part if they want to avoid falling victim to fraudsters. One way to protect yourself is to familiarise yourself with the common warning signs of online investment scams. This way, you can identify them immediately and use the best approaches at your disposal to avoid them and report them.

Common Warning Signs of Online Investment Scams

Unsolicited Approaches

Offering unsolicited investment opportunities is one of the most common methods scammers use to reach out to potential victims. In this approach, fraudsters pitch their ideas and claim to have insider information or exclusive deals to entice you into investing with them. These approaches can come in various forms, including unsolicited emails, virtual calls, and messages on social media platforms.

Excessively High Returns with Low Risk

Another red flag to watch out for is investment opportunities that promise excessively high returns with low or no risk. Fraudsters often use the lure of quick and easy money to attract unsuspecting investors, claiming that they have a “guaranteed” investment strategy that allows them to generate high returns consistently. While everyone wants to make a profit from their investments, it's important to be realistic about the potential returns and associated risks.

Overly Complex Investment Strategies

Scammers often use overly complex investment strategies to confuse and deceive their victims. They may use technical jargon or complicated terminology to make their investment opportunity seem more legitimate or sophisticated. However, behind the complexity, there may be little substance or actual value to the investment. These complex strategies can make it difficult for you to understand how your money will be used or what the risks entail.

Social Proof From Unknown Sources

Most fraudsters create suspicious social media accounts for their dubious companies and fill them with illegitimate testimonials, reviews, or endorsements to convince potential investors that others have successfully invested and profited from the opportunity. These testimonials may be accompanied by fabricated photos, videos, or social media profiles to make them appear more convincing. However, upon closer inspection, these endorsements may come from unknown or unverifiable sources.

Evasive Answers and Lack of Communication

Communication is a crucial factor when dealing with potential investment opportunities. When you can effectively communicate with your investment partner, you’ll be in a good position to evaluate their potential and make better decisions. However, scammers typically exhibit evasive behaviour and a lack of transparency when asked probing questions about their investment scheme. They may avoid providing clear answers to questions about the investment strategy, risks involved, or how investors' funds will be used. Additionally, scammers may become difficult to reach or become unresponsive to inquiries, making it challenging for you to obtain the information you need to make an informed decision.

Tips for Avoiding Online Investment Scams

Now that you’re aware of the red flags of online investment scams, the next step is to equip yourself with the knowledge on how to avoid them. Here are some essential tips to help safeguard your finances and steer clear of online investment scams in Singapore.

Be Sceptical of Unsolicited Offers

An important rule to remember when avoiding online investment scams is to be sceptical of unsolicited offers. Treating all unsolicited investment offers with scepticism provides you with a layer of protection that prevents scammers from getting private or sensitive information from you. You should also keep in mind that most legitimate investment opportunities rarely come from unsolicited sources. As such, it's crucial to approach such offers with utmost caution.

Check the Company’s Background

Before investing in any online opportunity, it's essential to conduct thorough due diligence and check the background of the company offering the investment. This includes researching the company's history, reputation, and track record, as well as verifying its credentials and legitimacy. Scammers often operate under the guise of legitimate businesses, so it's crucial to verify the authenticity of the company before entrusting them with your money. If you want to ensure that the company offering the investment opportunity is credible, visit Singapore’s Accounting and Corporate Regulatory Authority (ACRA) website and access their business information services to do background checks.

Confirm if the Offering Entity is Regulated

When considering an online investment opportunity, it's crucial to confirm whether the entity offering the investment is regulated by relevant authorities. Regulated entities are subject to oversight and must adhere to strict regulatory standards, which can provide investors with another layer of protection. By investing with regulated entities, you can have greater confidence that the investment opportunity is legitimate and compliant with regulatory requirements. You can check the regulatory status of investment firms and individuals through the Monetary Authority of Singapore (MAS) website.

Never Reveal Your Bank Account Details and Personal Security Information

You should never share your bank account details, credit card information, or personal security information (such as passwords or PINs) with unknown parties. Providing this information can leave you vulnerable to identity theft, fraud, and unauthorised transactions. If you ever encounter a company or individual purporting to offer investments and they ask for sensitive information upfront before proceeding with the offer, don’t communicate with them any further and report the incident to the proper authorities.

Consult with a Qualified Financial Advisor

When it comes to making investment decisions, seeking advice from a qualified financial advisor can be invaluable. A financial advisor can provide you with expert guidance, help you assess the legitimacy of investment opportunities, and tailor investment strategies to align with your financial goals and risk tolerance. With their assistance, you can gain valuable insights and peace of mind knowing that your investments are being managed professionally.

The allure of online investment opportunities can be tempting, but it’s essential to approach them with caution.  By staying vigilant and following these guidelines, you can navigate the investment landscape with confidence and protect yourself from potential fraudsters seeking to exploit unsuspecting investors.