BERITA DAILY LETTER: From Darshan Singh Dhillon, via e-mail

Today, the lives of a large segment of society is driven by materialism. Amount of wealth accumulated would typically denote one’s standing in society.

As such many would not hesitate to participate in investment schemes which offers quick and high returns even if they are dubious.

This would necessarily include investing money in “get rich quick” also referred to as Ponzi or multilevel investment schemes, which often turns out to be mega financial scams.

We all know that various type of investment schemes have existed for a long time and with the advent of technology, they become even more sophisticated, transcending borders. Exploiting gullibility and greed, fraudsters design and operate various schemes to dupe consumers.

High returns on investment are often promised as bait to hook willing parties to part off hard earned cash for quick and high returns. It is rather unfortunate when retirees end up as victims.

In many cases, these retirees lose all of their retirement funds, and it is even more unfortunate when they act under the influence of their children to participate.

Of late we read many stories in the media highlighting collapse of elaborate investment schemes, scamming investors of millions of ringgits in cash. Large number of those who fall victim are normally from the category of people who invest at a time when the particular investment scheme is ripe for collapse.

Pioneer investors would normally receive returns as promised as they are often used to recruit others.

Even if reports are lodged with the authorities, in many cases it is near impossible to seek refunds, as all cash would have been lost, siphoned off by mastermind scammers leaving investors lamenting over self-inflicted misfortune.

The question is, who should the victim pin the blame on when such a situation arises? In reality, it is the victim who should bear responsibility for their own actions.

We must always remember, if we have rights, we helm an equal amount, if not more, of responsibility. It is incumbent that we carry out early due diligence exercise before deciding to invest.

Wouldn’t an investment scheme which promises 15% to 20% returns per month smell fishy? Even when Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) has spearheaded efforts to educate consumers on the perils of investing in such schemes, it is unfortunate that new one’s continue to sprout and this is due to demand created by us, consumers.

While the Malaysia Consumers Movement (MCM) commends the MDTCC’s consumer education efforts, we are equally disappointed with Bank Negara Malaysia (BNM) for not doing more as financial regulators to curb such unscrupulous investment schemes.

For example, recent media reports has highlighted a case where investors were duped of RM400 million by a Kuala Lumpur-based gold investment company. Checks revealed that this company which was incorporated in June 2012 was placed on Bank Negara’s financial consumers watchlist in September the same year.

The question is, why allow this company to continue operating when already placed on a watchlist five year ago? Why allow an investment fund to grow into millions before acting? Why react to freeze accounts only upon the collapse of such investment schemes? What happens to the properties or monies of investment funds once accounts of perpetrators are frozen?

The MCM calls on the BNM to undertake proactive action and ensure early action is taken against scammers. There is a dire need to nip them in the bud!

To fellow consumers, when something is too good to be true, than it is probably not. Please stay away from such fraudulent investment schemes to avoid unnecessary misery. Scammers will continue to exist if we support them. Self-protection is the best protection.

Darshan Singh Dhillon is the president of Malaysia Consumers Movement (MCM)