Attack of the Clone Firms

What are they, and how do you spot them? Here’s a closer look at the latest spate of investment scams and how you can protect your wealth.

Clone firm scams involve fraudulent companies set up to look like licensed firms to deceive investors.

You can’t be too careful when it comes to taking steps to protect your hard-earned savings from financial crimes. With fraudsters always working out new ways to try and outwit us, one of the latest trends reported by the Securities Commission of Malaysia (SC) is in “clone firm” investment scams. These scams involve fraudulent companies set up to look like capital market intermediaries licensed or registered with the SC to deceive investors. The commission says several licensed entities have lodged reports on the cloning of their corporate identities by unknown individuals or organisations. The public is advised to be wary of the rising number of such fraudulent firms. HOW DO THEY OPERATE? They’ll try to convince you that they work for a genuine company and use high-pressure selling tactics to get you to buy their “investments”. However, these investments are worthless and often aren’t even offered by the company they pretend to be. Fraudsters often promote these bogus investment schemes via social media networks like Facebook, WhatsApp and Twitter, promising extraordinarily high returns with negligible risks. Victims are often instructed to deposit monies into personal bank accounts of individuals who claim to represent a legitimately licensed entity and/or a corporate account. HOW DO YOU PROTECT YOURSELF? The SC advises investors to always exercise due caution when considering investment opportunities, especially those promising high returns with little or no risks. Investors are also encouraged to verify the status of individuals or companies offering investing opportunities via the SC website at: - https://www.sc.com.my/regulation/licensing/licensed-and-registered-persons and - https://www.sc.com.my/development/digital/list-of-registered-recognized-market-operators If you suspect that you’ve been approached by unauthorised firms or individuals offering investment opportunities, lodge a report with the SC’s Consumers and Investors Department at 03-6204 8999 or send an email to aduan@seccom.com.my. Source: Securities Commission of Malaysia: https://www.sc.com.my/