Protecting Yourself from Scams
4.0 Protecting Yourself from Investment Scams
What Are Investment Scams?
Investment scams are fraudulent schemes disguised as legitimate investment opportunities. These scams are often promoted on social media or messaging apps and promise high or guaranteed returns with little to no risk. However, the reality is that they often involve non-existent or illegal products.
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4.1 How Big Is the Problem?
The data from the Securities Commission Malaysia shows a year-on-year increase in complaints and enquiries related to unlicensed activities and scams. While this reflects a rising trend, it also signals growing public awareness to verify before investing.
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4.2 Unlicensed Activities in Malaysia
Investment scams and unlicensed activities come in many forms and they're constantly evolving. Securities Commission Malaysia has identified several recurring and emerging patterns used to deceive the public. Here’s what you need to know to stay protected.
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4.2.1 Unlicensed Activities
Under the Capital Markets and Services Act 2007 (CMSA), any person carrying out a regulated activity (like investment advice, fund management, dealing in securities, etc.) must be licensed or registered with the Securities Commission Malaysia.
All foreign companies that target Malaysian investors are required to be licensed if they solicit or conduct business in Malaysia.
Additionally, even if the foreign entity is licensed overseas does not mean it is legal to operate in Malaysia. If it is not licensed or registered with the Securities Commission Malaysia, it is not permitted to offer, promote, or sell its products to the Malaysian public.
4.3 Mule Bank Accounts
A recurring tool in almost every scam is the use of mule accounts. These are bank accounts (either individual or company) used by scammers to receive and move stolen funds. Often, scammers pay or manipulate people into handing over their ATM card and PIN, or full online banking access, effectively turning them into accessories to crime.
Many mule accounts are dormant companies registered with SSM, giving the scam a layer of fake legitimacy.
Letting someone use your bank account in exchange for money is risky and illegal. This can make you an accomplice in financial crimes or scams, even if you didn’t commit the fraud yourself. Your name will be on the record, not theirs.
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4.4 Common Types of Investment Scams in Malaysia
Investment scams continue to evolve, and scammers today use fake identities, cloned websites, and even deepfake videos to appear legitimate. Here are the most common scams happening now:
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4.4.1 Clone Firm Scams
These scams involve fraudsters falsely impersonating licensed intermediaries, often misusing the names, logos, websites, or registration numbers of legitimate companies. They advertise fake investment schemes via social media or messaging apps while promising extremely high returns with little or no risk.
Scammers may claim they are from a company licensed by the Securities Commission Malaysia, or another foreign regulator and may even show forged certificates or documents to convince victims.
While it's safe to check official websites and verify licenses, it is not safe to deposit investment money into someone’s personal bank account. Licensed platforms never ask you to transfer money directly to individuals. Always pay through proper, regulated channels.
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4.4.2 Pre-IPO (Initial Public Offerings) Investment Scams
These scams typically involve real IPOs targeted for listing on Bursa Malaysia. Scammers pose as agents offering “exclusive access” to pre-IPO shares at a low entry price. Victims are often added to Chat Groups without consent, where they see fake testimonials and are asked to make payments into unrelated personal or company accounts.
On listing day, the scammer may pretend the shares have gone up and ask for more money to “release profits”, but of course, it’s all fake.
4.4.3 Deepfake Scams
Using AI-generated videos, scammers impersonate public figures like CEOs, religious leaders, or even Securities Commission Malaysia officers to falsely endorse investments. These videos look and sound real and usually appear on Facebook or Instagram with a “Learn More” button that links to phishing websites or suspicious apps.
Exploits manipulated videos or audio of well-known figures to deceive individuals into fraudulent schemes. Scammers typically start by posting deepfake videos on social media platforms. These deepfake videos would promote non-existent investments. Typically, redirects interested parties to a sign-up page that gathers their personal information. Once signed up, victims are contacted by agents who then deceive them by asking to transfer money into unrelated mule bank accounts.
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4.4.4 Chat Group Scams (e.g. Telegram / WhatsApp)
Ever been suddenly added to a WhatsApp or Telegram group that’s buzzing with "investment tips" or “investment packages”? Public will be added into WhatsApp/Telegram groups unsolicited. Scammers will claim to be an expert and promote non-existent investment products. The group may consist of many members, but most could be part of the scam. The schemes will be accompanied by fake testimonials by other investors to appear credible. Payments will be required to be made to unrelated bank accounts (mule accounts).
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4.4.5 Love & Romance Scams
Scammers will befriend the victim through social media or dating sites. After luring the victim into a romantic relationship, the scammers will convince the victims to invest in a non-existent investment scheme. The victim will be asked to deposit the money into mule bank accounts. Eventually, the victim will realise the relationship is a scam.
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4.4.6 Job Scams
Fraudsters contact people via WhatsApp or Telegram with a part-time job offer (e.g., liking posts, reviewing products). Victims are paid a small amount to gain trust, and then told they can “earn more” by investing into exclusive schemes which don’t exist.
The scam starts with the perpetrator offering online tasks through social media platforms. Several tasks will be given to interested individuals who will be paid commissions into their bank accounts. Tasks may include buying products online, reviewing Malaysian tourist spots, or liking/following social media pages. After completing tasks and earning the victim’s trust, the scammer will introduce another “agent” or “broker”. The victim will be tempted to invest in fake cryptocurrencies with promised high returns. To invest, they’ll be given mule bank account details for payment. Victims will be directed to a website to sign up for an investment platform and work with “agents” who claim to invest in cryptocurrencies. They receive fake return updates but can't withdraw their funds when they try.
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4.5 What’s the Safest Way to Invest?
The safest option is to deposit your money into a licensed investment platform. These platforms are regulated by authorities like the Securities Commission Malaysia. Avoid investing through WhatsApp or sending money directly to strangers, these are common scam tactics. Always check that the platform is licensed or registered.
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4.6 What Should You Consider Before Choosing an investment?
It’s tempting to focus on how much profit you might earn, but what matters more is the legitimacy of the investment, including its risks and licensing status. Always verify that the company is registered and not flagged in Securities Commission Malaysia Investor Alert Lists. Popularity or friends’ recommendations aren’t enough. Do your own due diligence.
4.7 What’s the First Thing You Should Do if You Realise You’ve Been Scammed?
The first and most important thing is to immediately stop all contact with the scammer. Don’t engage, don’t negotiate, and don’t give them more time, and more importantly do not transfer any further monies. After cutting off contact, you should report the case to the proper authorities such as Securities Commission Malaysia or PDRM. Quick action can help prevent further damage.
4.8 How to verify the legitimacy of an investment
The Securities Commission Malaysia provides two key tools to help the public make safer investment decisions: the Securities Commission Malaysia’s Investor Alert List and the Investment Checker.
The Securities Commission Malaysia’s Investor Alert List contains names of individuals, companies, and platforms that are not licensed or authorised by the Securities Commission Malaysia and may be involved in scams or unregulated investment activities.
Meanwhile, the Investment Checker is a search tool that allows users to verify whether a person, company, or platform is officially licensed or registered with Securities Commission Malaysia to offer investment services.
Additionally, Semak Mule is in an online portal developed and in use by Polis Diraja Malaysia that helps you check if a bank account or phone number has been used in scams. Before making any payment, search the account details there. If it’s flagged, don’t proceed. This is a free and simple way to avoid being scammed.
4.9 Common Tricks Scammers Use
Scammers often use emotional tactics and fake urgency. Some common red flags include:
• Promises of high returns with zero risk
• “Limited time only” offers
• Guaranteed profits in hours or days
These are all signs of a scam. If it sounds too good to be true, it usually is.
4.10 Final Tips
• If it sounds too good to be true, it probably is
• Always ask: “Is this licensed by the Securities Commission Malaysia?”
• Stay skeptical, stay informed