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500,000 Malaysians fell victim to investment scams between 2015 and 2017*. These scams can come in many different forms, but there are ways for you spot one. Look out for these 3 red flags before making the decision to part with your hard-earned money.

Too good to be true

Ever heard of an investment plan that sounds too good to be true? It probably is. Get-rich-quick schemes, such as the Ponzi or pyramid scheme, promises high returns to its investors at little to no risk. The “returns” were actually money received from earlier investors – and once the funds dry up, the scheme will typically unravel.


Warning sign: One telltale sign is when your income is based on the number of people you recruit and not upon the sale of products to customers. According to the Financial Industry Regulatory Authority, 70% of fraud victims based their decision on the advice of a relative or friend. Sometimes, the person selling won’t even know that they’re selling a fraudulent product, as they may also be a victim in a larger circle such as a pyramid scheme.

Pushy persuasion tactics

If an investment seller is hesitant to share additional information, risks and uses hard sell tactics, then steer clear. Instead of disclosing the truth, some fraudsters can use different persuasion tactics to get you involve in their schemes. This can include cold calling, purporting to be from a reputable institution. They then set up a face-to-face meeting, where they’ll ask personal questions and try to persuade you to commit with limited-time offers.


Warning sign: Be wary of any sellers who avoid providing information in writing. In Malaysia, it is required by law for sellers to fully disclose the investment risks and product. Conduct your own research and bring along an acquaintance when agreeing to meet in person.

Unregulated or unregistered sellers or products

There are a number of investment companies and advisors out there. However, if they can’t be found on the Securities Commission (SC) website page, then it is best that you avoid investing your money there. In Malaysia, the Securities Commission (SC) regulates the sale of investment products and services. Financial planners, fund managers and investment advisers are required to be licensed by the SC.


Warning sign: SC regularly update the list of unauthorised investment companies and individuals on its website. Avoid from investing your money if the company or person you’re dealing with is listed here.


What can you do:  Protect yourself and stand guarded against potential scams by being vigilant and doing your research about the individual, company and product. Stay alert to notice of recent scams by Bank Negara Malaysia’s website.


When in doubt, please call Bank Negara BNMTELELINK at 1-300-88-5465 or call CIMB immediately at +603 6204 7788 or email to For more information, please visit our website on Security & Fraud Awareness.




This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well- informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.