Friday, 9 March 2012

Beware of hard-sell tactics, warns SSM

Beware of hard-sell tactics, warns SSM - Star Online

1. Malaysians lured into investing in illegal interest schemes have been fleeced of at leastRM620mil over the past three years.

2. The Companies Commission of Malaysia (SSM), concerned over the rise of such scams, published an advertorial in the wake of recent complaints over a Canadian land-banking scheme to remind investors of the risks involved.

3. An interest scheme is a form of investment in a medium other than shares and debentures (unsecured loans) involving the pooling of public funds to finance the business activities of a company.

4. In return, participants are offered a specific return on their investment in the form of money, benefits or facilities. A common modus operandi involves convincing people to make a one-off investment in a business endeavour that is managed entirely by the operator.

5. Many illegal interest scheme operators often used aggressive marketing strategies, such as treating their potential “marks” to dinner or high tea at a posh hotel and preventing them from leaving before they commit to an investment.

6. Sometimes, support letters by dignitaries or celebrities are used to lend credence to the operator. In many cases, we have noticed that the dignitaries or celebrities were not fully apprised of the details of the scheme, or were unaware that they were being associated with the scheme.

7. Another is to convince investors to build their own business (often with a buyback guarantee) on the condition that they purchase their training and equipment from the operator. The operators are creative. Investors in interest schemes should be wary if an operator appears too eager to close a deal.

8. A few years ago, agriculture and its products (like lemon grass, leeches, earthworms, seaweed) were very popular.

9. Recent products include livestock (swiflets and arowana fish), plantations (palm oil, jatropha and agarwood), leisure and property development (holiday homes and hotels), equipment (ice-cream, ICT and water-vending machines) and gold. To date, SSM has registered 173 schemes worth about RM1.29bil.

10. A list of registered interest schemes is available on the SSM website (http://www.ssm.com.my/en/company/is-registered-scheme-public) and the public can call 03-2299-5500 to check or verify offers from interest scheme operators.



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