5 Telltale Signs You're Dealing with an Investment Scam
5 Telltale Signs You're Dealing with an Investment Scam

5 Telltale Signs You’re Dealing with an Investment Scam

With the economic downturn in the wake of the COVID-19 pandemic, everyone seems to be on the lookout for a financial windfall or a side hustle that can bring extra income.

Who wouldn’t want a couple of hundred or possibly even thousands of dollars on the side every month, right?

You’ve surely encountered these kinds of offers of investments, businesses, or activities that you could get into with the promise of earning money, especially online.

However, if you’re not careful, your dreams of growing your money might end up in tragedy as you lose all your hard-earned cash in an investment scam.

These kinds of criminal activities are increasing at an alarming rate these days. Singapore police report that victims lost as much as SGD 201 million to scams in the past year alone, with cases rising to more than 15,700 from just 9,500 in 2019—a staggering increase of around 65 percent.

What’s more astounding is that scams now comprise as much as 42 percent of the total nature of crimes committed, versus only 27 percent in 2019.

25 Money Making Scams [+ Guide: How to avoid them]
25 Money Making Scams [+ Guide: How to avoid them]
Among the top types of these scams are phishing, e-commerce scams, identity theft, and impersonation on social media. Also, forex scams Singapore authorities warn citizens about are among the most prevalent finance- and investment-related scams today.

Don’t fear though, as information and education are the proper tools to counter the spread of scams. Make sure that you know the telltale signs of an investment scam so that you can immediately steer clear of it. Here are some helpful tips on how to determine if an offer is a scam:

The Returns Are Extraordinary

There’s a good reason for the saying that if something is too good to be true, it probably is. In the case of an investment proposal that promises higher than average returns with little to no risk at all to the money you will be putting in, think twice.

Always compare it with existing, commercial investment offers and understand what returns are possible with the attendant risks. Also, put it this way—if there is such an investment that offers returns more than what banks and financial firms can offer, don’t you think these institutions would have been on to it as well?

It Is Not Regulated

If a person or company offering an investment is not listed in the Financial Institutions Directory of the Monetary Authority of Singapore (MAS), something is terribly amiss.

Of course, they may claim from the onset that they are, but don’t take their word for it. Check for yourself and report any unscrupulous individuals and organisations to the MAS while you’re at it. The MAS is the key government agency looking out for the welfare of investing citizens and residents in Singapore.

There are clear laws that mandate transparency and disclosure of all terms of an investment product being offered on the market. So if something is unclear about the investment being offered to you, don’t even think of taking the plunge.

The Reviews Are All-Too-Glowing

Sometimes, if everything seems too fine and dandy, you have to dig a little bit deeper to ascertain the truth. Positive recommendations and testimonials from other people regarding a certain investment may be outright fictitious or fake, so be wary of falling for them.

A company may also be touting achievements and an impressive resume of successful investments, but again, these may be fluff only. It’s best to do your own research into the legitimacy of these claims. Also, always remember that every investment carries with it a certain level of risk, so a spotless recommendation of an investment may be a red flag.

The Offer Is Being Pushed on You

There are many advertisements for investments that communicate a sense of urgency—a “now or never” message. Be extra careful because these are usually tactics of a scam to pressure you into handing over your money immediately.

And once it’s in their hands, that may be the last time you ever see it. Legitimate investments should be very clear in terms of their offer and professional agents never threaten, pressure, or cajole you into buying them.

There Is a Monetary Reward for Referrals

While the idea of getting a commission for referring friends and family to get into the same investment as you did may seem very attractive indeed, take a step back.

Aboveboard investments do not usually resort to such marketing tactics and they are not much concerned with reaching a large number of people as much as their primary task should be to grow the money legitimately. Amassing investors is the hallmark of financial scams such as pyramiding or Ponzi schemes.


While scammers are indeed becoming more and more sophisticated in terms of duping people, don’t get discouraged from investing.

Growing your money is an integral aspect of overall financial wellness, and you can achieve this the right way through proper research, asking the right questions, and going only with reputable and authorized investment agents and companies.

If you’ve got a money saving tip, some advice, or ideas you think our audience would be interested in, then we’d like to hear from you. Now you can write about Personal Finances.

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Daily Money Saving is a community built around the notion that saving money is good. We offer free articles and information on all aspects of personal finance including debt reduction, how to save money, how to make money and how to invest.

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