investment scams

How to spot investment that are actually investment scams

You know you gotta invest. That’s how you can achieve financial freedom. But dude, there’s way, WAY too many investment options out there. Some are legit, some are not. How do you know which ones are investment scams?

As someone who reads/works/writes about finance, I like to think that I can make that snap judgement whether an investment opportunity is legit or not. The last thing I want is an ‘investment’ that actually scams me out of my money, you know? In a Lowyat thread I was recently reading, this girl was lamenting her father’s tendency to get sucked into such ‘investments scams’, which resulted in him losing much of his money. Fella’s retired, too 🙁 My heart breaks for this girl.

So I thought, Imma write about what I know about spotting un-legit investments.

Too trusting of friends and families until emotions>facts

Many people get sucked into these investments scams because their friends and families told them about it.  Unfortunately, in this case, word of mouth referral is the kicker, and a pretty potent one at that. These types of investment scams tend to rely on plain ol blind faith you put on your friends and family.

It’s tricky, because your friends and family will be in denial mode. They won’t like to be wrong, so they’ll try to convince themselves that they made the right decision and stand by their ‘investments’. They’ll say: “No of course its not scam, it works for me!”

But you still have to make your own research.

Making research is a simple process. Google: ‘investment name’ + scam. If something pops up, avoid.


If you have ever answered a job advertisement or an investment talk that brought you to a ‘seminar’, you’ll know what I mean.

You’ll get vague emails – come here at here. You’ll ask them what it entails. The lady gave some vague replies. You attend, and there’s a freaking stage where person after person hops on and tell the audience how the product/whatever CHANGED THEIR LIVES.  #blessed

It’s important to say here that not all of them are scams per se, but they have significantly simplified the process. I’m talking about Herbalife. About Amway. About countless investment methods that is THE ONE (one, I swear to God, uses Chinese Zodiac to predict whether the foreign exchange will go up or down).

No. Going in with the ‘this is easy!’ mentality is not the way to. There’s hard work involved.


Ponzi is an investment that works, but is not sustainable in the long run. Only people early in the game get to make money here. They can be advertised via friends and families, and via seminars too.

Ponzi promises unrealistic returns. Get 30% returns on your investment in one month! But you gotta recruit more people (I mean, where else does that 30% returns would come from).

Ponzi brings me to..

Multi-Level Marketing

Not all MLMs are Ponzis, but all Ponzis are MLMs. On that point alone you have to be careful.

Bringing up the cult bit again, ooof people get waaaay too absorbed into their MLMs, even if its legit. I admit I have avoided people who talk about it, simply because I ran out of shits to give. Easy! (Not really) Profit! (Well yeah but you have to pay upfront for your ‘starter kits’). Sell products that CONFIRM people want! (More like sell them overpriced slimming products, beauty products, list goes on).

I am not a polite person, when it comes to MLMs. It’s usually mis-advertising at its finest.

Some random, super-niche, time-limited opportunities

One of the weirdest I’ve heard so far is someone offering suitcases full of money that was mysteriously soaked in ink. He offers to sell you millions of dollars worth of the (useless, ink-soaked cash) for reaaally cheap and all you have to do is to buy ‘soap’ that can remove the ink. All you have to do is wash that cash (you read that right) and boom, instant millionaire.

I also read about a cow feed formula that can supposedly make your cows (how specific) produce 10x more milk, so you get 10x the profit. But the formula is not approved by FDA or whatever and they can’t sell it openly.

Very creative, these people.


I always say, if its too good to be true, avoid. What’s a more realistic return, when it comes to investments?

  • Low risk – ASB, fixed deposits, savings accounts, blue chip stocks – 2-8% a YEAR
  • Medium risk – property (the risk depends on location+luck, but hey), normal stocks, ETFs – 0-50% per year? This is a veeery wide category
  • High risk – penny stocks, bitcoin (ayyy just telling it as it is) – unlimited % per year, but also a huge risk of not getting your money back, so..
  • Die – Ponzi, random investments

So this includes what NOT to invest. For what to invest, read my guide on what you can invest with RM1000.

So if anything promises returns of 10% or more a YEAR, research the heck out of it. The only ‘safe’ investment is low risk investments. If you do medium or risk investments, only invest what you can afford to lose.

I feel like the above more or less covers 99% of scam investments. They prey on your greed, which sucks, because I have this human flaw too. So we have to keep looking out and update each other on this.

If I missed another tell-tale signs of investment scams, please do let me know – share with us in the comments section. You can also tweet me at @surayaror and tell me.

Bonus: Invest your money, but also be smart about money management. Read my Hack: How to Maximise Cashback Credit Cards article.

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    1. They follow classic HYIP (high yield investment program) formula. Very active in ‘recruiting’. It’s like any other pyramid scheme- those at the top benefits, the majority at the bottom will lose their investment. Best to avoid. They’re also in Badbitcoin Badlist.

  1. Trust me when I say Bitkingdom is a con job. Do not get involved with them.. Their tagline is ending poverty but its more like creating poverty…

  2. Hi Suraya
    Have you heard of a company called GMK. Claimed to be registered in USA but only active in China and Malaysia promoting crypto currency called kitcoin. The CEO is Mr. Wang Zhong/WangLiQing. I searched and found that kitcoin is actually for cats promoted by another person. Members invest as low as RM1,900 and get commission for recruiting more members.

    1. It’s for… cats? As in, meow? Oh my god that’s hilarious. This seriously made me laugh Jason 🙂

      If the business model relies on recruiting members, it’s probably a scam :/

      1. Suraya: ” If the business model relies on recruiting members, it’s probably a scam :/”
        Amway Business Owner depends on sponsoring(recruiting) people. You cant build your business BIG just by being in the biz alone.
        So recruiting is not necessary a scam biz.

        1. Hi Peter,

          Not all Ponzi is MLM, but all MLM is Ponzi.

          I maintain behind my statement. There is a difference between properly recruiting people and downright harvesting from them without recourse.

  3. Have you heard of Value Investing College (Singapore) led by Sean Seah? What are your thoughts about it?

    1. I have not heard about the college. I’m ok with any investment schools that don’t display red flags. If it’s recruitment-based, I’m out

  4. Hi Suraya I read your article on bit coins and find it informative and helpful.
    I did not invest in Bitcoins but in MFace(mcoins).I’m profiting from it.I also invested a small amount in One Coin.Doing well
    One more I invested in Zenithgold (not similar to Geneva gold) and it is fantastic

    Lately I was introduced to 4Corners.which I’m working on.You can researched on all the above investment I listed but tell me the flaws( I already know the benefits ).

    Formula36. Sponsor only 2 people and pay USD36 for them(one time out of your pocket) this video.I’m willing to Pay It Forward for you to join provided you too do the same.In a month we can make USD10K.(RM45,000)
    Thank you.

    1. Hi Peter,

      You will not like what I’m about to tell you.

      MFace I have not heard about, but a quick ‘Mface scam’ google list strongly indicate its a scam.

      One Coin is a known scam. Authorities are cracking down on them worldwide. In recent news, both Germany and India authorities are taking action. Please google ‘One coin’ and look under the news tab, or click here:

      Zenithgold is listed in Bank Negara Malaysia’s unauthorised list. Check for yourself, no 285.

      Please, take your money out while you can.

      Please do not join 4corners or Formula36. I’ve looked up them both and they operate similarly. Levels and affiliates and whatnot.

      For legit investment opportunities, please see my what to invest with RM1000 article.

      All the best to you, Mr Peter.

      1. Thank you Suraya for you prompt reply.
        if you google Amway scam (of for that matter any biz) you definately will come out with a list of proponents of anti
        You Tube is full of them.
        So my point is: Dont completely trust Google search . Do your own research

        1. Hi Peter, thank you for your advice. I admit I have much to learn.

          I’ve done my due diligence here and won’t convert the converted. Wishing you all the best.

  5. Thanks Suraya
    In 4Corners the investment is USD18 one time off.Potential earning is USD10,000. I am even willing to pay for anyone this USD18 to join.Anything to lose?
    If a person thinks thats alot of hard earned cash to lose then I suggest your :
    For legit investment opportunities, please see my what to invest with RM1000 article.

    1. From what little that I know, kazuki coin doesn’t have a strong value preposition. Others can add what they know though

  6. Hye Ms Suraya,

    I was being approached by the Bitcoin agent last month and he convince me to start investing in it. But what I’ve been told to do is to get more people to invest in bitcoin so ill get a bonus for 1 person that I invited. It sounds like MLM to me? Appreciate if you can comment on my experience. But that person has really inspire me to learn more about bitcoin.

    1. Hi Fatkhul,
      Yeah, that does sound like classic MLM. Bitcoin doesn’t need ‘agents’. See my bitcoin guide here for more details about investing in them:

  7. i got a call and they introduced themselves as Luxembourg Offshore Banking . They invite me to open an account from their bank and they help you to make trade by using your account . it can make some good profit in just a little of time . i not really know how they work and they can guaranteed 30 to 50% profit every month at least . I’m wondering will it be a scam ?

      1. Hi
        The link is broken.

        I also came across one colleague who introduce OTM Capital and OTM Ventures, he told his friends did successfully, and now he also invests too. He show me the app to see the market. To be honest, I still do not believe much, the rate is 6-8% but minimum 1000 usd, they will take 600RM agent fee, and you can get profit from the 3rd months, meaning this investment takes minimum 3 months, initial input is 4600RM.

        Can I trust this investment? My colleague is also investing. I am very confused.

        1. There are so many red flags there… I personally would stay away from it. All the best to your colleague..

          1. please dont invest any money in this OTM related products, been invested a huge portion of money but i couldnt get it back, they change their policy without prior notice from otm capital to otm trust. the trust unit cant even get sold after queuing for 6 months. some claims the withdrawal dont get any money deposition in bank account. this bunch of scammer still actively giving talk and doing recruitment to scam others money.

        2. “To be honest, I still do not believe much, the rate is 6-8% but minimum 1000 usd, they will take 600RM agent fee, and you can get profit from the 3rd months, meaning this investment takes minimum 3 months, initial input is 4600RM”

          You are right, trust in your instinct. OTM indeed a SCAM !

          I have invested 15K USD in the so called 18 months contract. During maturity, the agent told me can’t withdraw my principle as promised capital guarantee in the beginning, and forced to convert into another fund called OTM Trust.

          Looking deeper into OTM Trust, it seems there isn’t any physical business behind what they have proposed. Now the agent is not responding to my calls and messages.

          Stay away from this OTM !!!

          Here is another forum that other victims have posted:

          1. ask your colleague to withdraw the amount he invested. be careful those that cannot withdraw might just ask new investor to “buy out” their account. it also means finding someone to sacrifice.

    1. Hi matjaz,

      How fascinating, thanks for sharing this type of investment opportunity!

      It doesn’t appear to have the classic red flags, although I doubt the projected 19ish% annual ROI includes the fees you have to pay in return for their management services. I’d definitely ask them about the upfront costs, considering durian trees take like, what, 5 or so years at least to mature before it bears fruit? Also ask them if they have the exclusive rights to buy your durians from you

  8. Hi there Suraya,

    Mind sharing your thoughts about Exp Asset? I have friends investing in it and earned substantial profits. I looked up about it and found YouTube videos by a particular person who outrightly convince people to get into Exp Asset. Definitely a MLM but Ponzi?

    1. Hi Chris,

      I’d avoid it. The FB page has so many red flags – 1% daily ROI, showing off stacks of money, luxury items and cars. It’ll run out of gullible people and collapse.

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