Investment Scams

“I am the victim of an investment scam; what can I do?”

Investment scams come in many forms and are often set up to look like a legitimate investment opportunity. Victims of such scams are often reluctant to admit that they invested money in a scam, but there is no need to be embarrassed. The reality is that no-one is safe against these often sophisticated and highly technical scams. Many scammers are excellent at what they do.

Recently, a Singapore IT professional was scammed into thinking that he was helping the government to catch hackers. He was asked to deposit $180,000 into a Hong Kong bank account to help the authorities to track down scammers who stole personal information from many victims. In reality, the IT professional was the victim of the scam. The scammer introduced himself as a cyber police agency officer. There is no such agency in Singapore.

In another investment scam, a freelance IT consultant cheated 62 people of more than $500,000 to fund his gambling habits. He even scammed some of his friends. He used his Facebook account to post about non-existing investment schemes offering good rates of return. He even asked friends to share the posts. Some of the victims received some returns which motivated more people to “invest”.

These are just two examples of how innocent people were scammed into parting with their hard-earned money. Typical investment scams in Singapore include:

• Cloned firms pretending to be registered companies
• Cryptocurrency frauds
• Wine investment scams
• Ponzi schemes
• Pension frauds

Technology has made it much easier for scammers and fraudsters to contact victims and extract personal information from innocent victims for unlawful purposes. The number of scams in Singapore is skyrocketing with scams getting more sophisticated by the day.  Many victims transfer money into what they think are investments, only to find out later that they have been scammed. There is no investment and no returns.

Thankfully not all have to be lost when you’ve fallen victim to an investment scam.

What can you do if you have fallen victim to a scam?

As a victim, you can help to track down the scammer and bring them to justice. Don’t try and do it yourself, though.

Report the scam

In Singapore, the police force and the National Crime Prevention Council (NCPC) has a helpline where victims can report scams. Call the anti-scam hotline on 1800-722-6688 to report any scam. You can call this helpline even if you only suspect that there is a potential scam.

If you are sure that it is a scam, you can file a police report at your nearest police station. To file a police report, you need to provide as much information as possible about the scam. Take screenshots of messages, copies of emails and online conversations to assist the police with the investigation. If the police investigation is successful, the scammer can be charged under the penal code and upon conviction, be fined or sent to a term of imprisonment.

By reporting the crime, you can bring the scammers to justice. There is, however, no guarantee that you will get your money back after a criminal prosecution. In a few cases, the scammer might offer some form of restitution in the hope of getting a lighter sentence. Depending on the circumstances; the court may issue a compensation order for the offender to compensate the victim.

Besides reporting the scam to the authorities, it is important to contact your bank or financial adviser as soon as possible alerting them of the scam. In some cases, the bank can block the transfer if you act quickly enough.

Alert your family and friends to protect them against the scammers.

How can you get your money back?

A victim of an investment scam can file a civil claim against the scammer to recover some or all of the money lost in the scam. Filing a civil lawsuit can be complicated and expensive. It is advisable to seek legal advice to discuss the merits and possibility of a successful claim.

There are many legal options to recover your money. Recovery of your money may require a range of expert skills that a specialist investment fraud lawyer can provide.

There is often a fine line between a legitimate investment that failed and a scam. A lawyer with experience in investment scams will have the knowledge and skills to identify sophisticated investment scams. They understand how these schemes target investors and how scams are operated. Sometimes legitimate investments go wrong due to professional negligence. If that is the case, an experienced lawyer can assist with a claim for professional negligence to recover your money.

To file a civil lawsuit, you need to know the scammer’s identity and whether the scammer has the assets to compensate you. Lawyers use private investigators to track and trace the scammer or specialists such as forensic accountants to unravel sophisticated schemes and follow the money trail. Even if the scammer is in another country, an experienced lawyer will have strategies to recover assets. If a company was used to elicit investments, a lawyer could seek orders to freeze bank accounts and other assets which can be used to compensate victims.

If the investment scam was committed against many individuals, the victims could share the costs by getting a lawyer to institute a class-action.

In some cases, it might be challenging to prove investment fraud for a successful criminal prosecution. That does not mean that there is no hope to recover your money or at least part of it. The civil standard of proof requires “on a balance of probabilities”, which is lower than the criminal standard of beyond a reasonable doubt. An experienced lawyer will be able to advise on your chances of meeting the burden of proof.

It is important to seek legal advice as soon as possible; depending on the circumstances, your right to sue may be subject to a time limit under the Limitation Act.

How to avoid a scam in future

It is often easy in hindsight to say, “You should have known”. In reality, it is not always easy to spot a scam. There are, however, a few warning signs that are worth keeping in mind.

The golden rule, “if it sounds too good to be true, it probably is” remains a great checklist when it comes to investment scams.

• Be careful of promised high and guaranteed returns.
• Be wary of unexpected and unsolicited phone calls or emails.
• Focus on the language and tone – companies and financial institutions usually expect excellent oral and written skills from their employees when contacting customers. Poor grammar or language might indicate that it is not a real employee.
• Don’t be pressured into an investment. Be extra careful of offers with time pressures.
• Be wary of requests for secrecy – if it is such a good opportunity, why keep it a secret?
• Don’t fall for flattery – ask yourself, why you’re being selected?
• Don’t be fooled by glossy brochures or flashy websites. Many investment scams are highly professional and sophisticated.
• Be careful of befriending strangers on social media. Scammers often befriend their victims before defrauding them.

And don’t think you can’t be caught twice. Fraudsters share lists of previous scam victims. They might even contact you pretending to want to help you recover your lost money for a fee.

Take immediate action

If you think that you have fallen victim to scammers, don’t be embarrassed. Stop communication with the scammer, and don’t try to “catch” them yourself. Warn friends and family. Report suspicious behaviour to the scam alert hotline. Contact the police. If you’ve already parted with your money, seek legal advice as soon as possible to try and recover your money.

You won’t always be able to get your money back, but an experienced lawyer will help you determine your options and your chances of successfully recovering your money.