Singapore govt. warnings about scams

Hua Mulan

Staff member

Protect Yourself Against Bogus Investment Opportunities

Cold calls, emails or bogus internet websites are common techniques used by unregulated persons to solicit business for bogus investments. Increasingly, consumers are being bombarded by spam mails or unsolicited faxes/mails/phone calls regarding various investment or money making opportunities. However, some consumers may not be familiar with the various scams and swindle schemes available. In this article, MoneySENSE brings you some examples of commonly-found scams and tips to deal with them.
Common Scams and How They Work

You may have heard of people who are victims of the following scams, or have received letters/emails/phone calls that could be part of such scams. Read on to find out more about the characteristics of some of these more commonly found scams and ways to deal with them:

Boiler-Room scam, also known as “Cold Callâ€
Salesmen make repeated unsolicited calls offering the sale of shares in third party business, often in companies you have never heard of.
Maintain websites to give consumers the impression that their operations are legitimate.
Overseas boiler-room scams may make use of Singapore telephone numbers to create the impression that they are based in Singapore.
Salesmen may make use of high-pressure tactics, promise high returns with low risks but do not provide a lot of information about themselves or their investments.

419 scam, also known as “African/Nigerian scamâ€
Fraudsters send emails/letters/faxes/SMS claiming acquisition or inheritance of huge sum of money.
They then seek help from victims to supply a foreign bank account number to transfer the money out of Africa (or any other country).
They offer huge commission but victims are made to pay large sums of up-front payments as taxes or fees to transfer the ‘funds’.
Another ruse used by the fraudsters is to dupe victims into believing that blackened US currency notes can be used after being ‘washed’ by special chemicals.
Victims are made to pay up-front payments to buy the special chemicals.

Lottery scam
Fraudsters send emails/faxes/mail/SMS or call the victims claiming that they have won prize money in overseas lottery.
Fictitious documents such as lottery tickets might also be enclosed.
Fraudsters may request for consumers’ bank account number or personal particulars to facilitate the transfer of funds.
Consumers are also asked to pay large sums of up-front payments as taxes or fees for administration and transference of funds.

Ponzi scam
Fraudsters promise high returns to investors, often claiming their investments are low risk simultaneously.
Fraudsters then use part of the money deposited by subsequent investors to pay dividend or interest to earlier investors.
Investors are lured into believing the investment schemes are genuine and encourage their friends or relatives to participate. Alternatively, they may decide to increase their own investment.
Ultimately, the scheme collapses due to lack of number of new investors.

Pump and Dump scam
A company may post a glowing press release about its new venture or profits. The company may then become an unwitting victim of a pump and dump scheme.
Fraudsters may buy stocks of this company. Fraudsters then post stories on bulletin boards, blogs or forums on the attractiveness of the stock. Often, there is no way to verify the authenticity of these posts.
Investors may then rush in to buy the stock, resulting in the stock price of the company being pushed upwards.
Fraudsters then sell their stocks at a profit. After they have sold their stocks for a profit, the stories cease and the stock price of the company falls.

Check the website of Commercial Affairs Department (CAD) of the Singapore Police Force regularly for crime alerts and information on other common scams.