The lure of investing in a dubious scheme, usually online, holds a very high risk. — Photo from pexel.com
SARAWAKIANS lost a total of RM77.7 million to online scams in the first seven months of this year, according to a report published on Aug 1.
There were 2,256 cases versus 1,398 recorded in the same period last year, an increase of 61 per cent.
The amounts lost were 47 per cent more than last year’s RM52.9 million.
The majority of victims were in the age group of 30-40, followed by 18-29, and those over 60.
These figures only accounted for those who had made reports to the authorities; it is suspected that an equal amount was lost due to no report made.
What is it about us humans that lures us into parting with our hard-earned cash and savings into, oftentimes, incredibly fantastical returns in investment opportunities?
For many of us older than 45, you have heard names like SwissCash, Genneva Gold, Walton, Edgeworth and The Gold Label. These, and many more, were purveyors of investments in gold bullions, currencies, land and property as far away as in Canada.
These were the names of scams that were popular and common before the days of the Internet. The money game then might have been different, but the methodology and standard operating procedures (SOP) were the same.
They were all basically con-jobs, but during their heyday, which lasted over a decade or so, had cheated, defrauded and stolen from thousands of Malaysians millions of their hard-earned savings.
A few of these, most notoriously Genneva, have been brought to book by the courts, but the majority have escaped the judiciary system. Whatever redress and repayments to monies lost to them have been minimal at best.
Why did so many smart people trust the Genneva gold scam?
Psychology played a role. Gold felt familiar and ‘safe’.
The agents came recommended by friends, and early redeemers often got paid – classic reinforcement.
Marketing highlighted tangible bars and ‘inspections’, which mimicked institutional custody.
Meanwhile, the guaranteed-return narrative appealed to retirees seeking certainty.
Add social proof – seminars full of people, success stories, and VIP-sounding titles – and the scepticism would fade.
Unfortunately, that comfort hid a basic mismatch: gold’s price moved, while the contracts promised fixed outcomes.
In the case of land and property development in scams with ‘international’ companies like Walton and Edgeworth, replace ‘gold’ with ‘land’.
Agents selling those investments had even flown potential high-flyer investors to view landed properties as far away as Alberta in Canada to gain their trust and eventually, their cash.
Sadly, many investors are left today holding on to certificates of land titles in Canada, worth just a fraction of their initial investments.
To take legal action to secure a settlement would be just throwing good money after bad.
Today, we are facing an even bigger threat from the Internet – from cryptocurrency and other forms of online scams: too many, too smart, and overly in abundance.
Just go online to search the words ‘online scam’ or ‘cryptocurrency scam’, and you’d get dozens of cases from all over the world.
On Nov 12 this year, AFP reported that a Chinese woman, 47-year-old Zhimin Qian was sentenced in a London court to 11 years and eight months jail for defrauding around 128,000 people in China between 2014 and 2017 of billions of dollars, much of it converted to bitcoin, in a Ponzi scheme that promised investors up to 300 per cent returns.
Her Malaysian accomplice, Ling Seng Hok, 47, was also sentenced to four years and 11 months in prison.
It had taken the London Metropolitan Police seven years involving one of the largest and most complex ever undertaken investigation and collaboration with multiple sides, including Chinese law enforcement.’
Despite defrauding more than 128,000 investors over a three-year period, only 1,300 victims have come forward. The details of a compensation scheme for them are being proposed by British authorities to be thrashed out on civil proceedings at the London High Court.
On the same day, in Bangkok, Thailand, a Chinese racketeer allegedly linked to a scam hub in Myanmar was extradited from Thailand to China.
She Zhijiang, 43, faces criminal charges in China for running online gambling and fraud operations.
He is accused of ‘transforming a village on the Myanmar-Thailand border into Shwe Kokko – a resort city said to be custom-built for gambling, drug-trafficking, prostitution and scams targeting people around the world.
The hub has gained international notoriety for housing Internet fraud factories where workers – some of them trafficked, and a few are Mandarin-speaking Malaysians – rob foreigners with romance and business cons worth billions of dollars annually.
According to a United Nations (UN) report in 2023, scam victims in Southeast and East Asia alone were conned out of up to US$37 billion, with global losses being likely much larger.
Beijing has led an international pressure campaign to crack down on the scam hubs, irked at its citizens being lured to work in the industry and targeting other Chinese with their cons.
China’s punishment for those found guilty is harsh: the country has sentenced five people to death this month alone for their involvement in a violent criminal gang with fraud operations in Myanmar’s Kokang Region.
Imagine the sentences that would be meted out to both Zhimin Qian and Malaysian Ling Seng Hok had they been caught in China, and not the UK!
You have probably heard of cryptocurrency, a trendy new way of investing your money.
How safe are these investments, and how do you protect yourself from cryptocurrency fraud?
Cryptocurrency is a digital asset that uses encrypted networks to execute, verify and record transactions without the involvement of a centralised authority, like a bank or the government.
Cryptocurrency can be purchased via an exchange or from a kiosk or ATM.
Bitcoin, the most well-known cryptocurrency, may be accepted as payment at some stores; cryptocurrency is generally not accepted in exchange for goods and services.
Consumers should be cautious of investing in cryptocurrency, which can be highly volatile.
Additionally, criminals employ a variety of scams involving cryptocurrency.
Avoiding cryptocurrency scams:
• Do not respond to personal solicitations involving cryptocurrency from an unknown source (e.g. through messages on WhatsApp, Signal, Telegram, Facebook, email, text, et cetera).
• Do not send cryptocurrency to someone you have never met in person; even if you have met them, be wary.
• Verify all requests for payment of a debt independently. If a caller claims to be from a company or government agency, hang up and call the published customer service phone number of the company or agency. No legitimate entity will demand payment by cryptocurrency, or promise you a reward for paying in cryptocurrency.
• Understand that if a cryptocurrency investment seems too good to be true, it most likely is.
• Be aware that you will not be able to reverse a cryptocurrency transaction and get your money back.
• Never invest money you are not prepared to lose.
Ultimately, it is still our own personal decision to make, and we have to ask ourselves this one simple question – if we are happy with what we have right here, right now with what we have, content, happy, healthy and at peace surrounded by family who loves us and friends who look out for us, what else do we need?
If one can tick off all these boxes, is financially secure and is living a satisfied life, why take any risks at all, especially if it can involve any form of disruption to your routine.
By nature, some of us will always want more, seek a higher goal, and aim for more abundance.
Just be careful if you do that, as the ‘God of Greed’ and the ‘Prince of Deception’ are always on the lookout for easy prey, and they always work together hand in glove.
I conclude with these two quotes from the Bible:
“Beware! Don’t always be wishing for what you don’t have. For real life and real living are not related to how rich we are.” — Luke 12:15
“Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.” — Ecclesiastes 5:10
Be happy – being content is already a blessing.
* The opinions expressed in this article are the columnist’s own and do not reflect the view of the newspaper.
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