Tuesday, October 15

When it is too good to be true


Police caution public against promoting, falling prey to pyramid schemes and Internet scams

KUCHING: The public have been warned to be vigilant against investment or business schemes that offer exceptionally good returns as they are likely to get their fingers burnt if they get involved.

The advice came from state Commercial Crime Investigation Department chief Superintendent Mohd Firdaus Abdullah when speaking to The Borneo Post yesterday.

He was responding to a query if anyone had made a police report against a United States based Internet scheme Zeekler and Zeek Rewards which was closed down by the US Securities and Exchange Commission last month for allegedly being a global ponzi-slash-pyramid scheme.

The Borneo Post was following up on the case because it received several enquiries from the public regarding the scheme.

The closure of the website and its headquarters had resulted in an estimated two million members worldwide losing their investments totalling US$600 million.

Firdaus confirmed that his department had not received any report on the scheme so far adding that the number of Malaysians involved was not known.

He cautioned that that those who promoted any ponzi or pyramid scheme could be charged if the people they recruited made a report against them.

“If the scheme is later found to be fraudulent, those who have been involved as a recruiter by persuading others to join may be charged under Section 25 of Banking and Financial Institutions Act 1989.”

Section 25(1) provides that no person shall receive, take or accept deposits under and in accordance with a valid license granted under section 6(4) to carry on banking, finance company, merchant banking or discount house business.

Firdaus also warned the general public of the different types of scams that promise exceptionally high returns in the forms of gold investment, platinum scheme or property deals.

He said fraud could come in many forms and the rule of the thumb in assessing such schemes was when the profits were too good to be true then something was right.

In many cases, elderly people became victims of scams and fraudulent schemes because they were trusting in their nature while single women often fall for online love scams.

Meanwhile, Firdaus revealed that from January to August this year, the total loss through reported commercial crimes dropped 13 per cent to RM17.2 million as compared to the same period last year which was RM19.8 million.

“The cases involved are mainly criminal breach of trust and cheating,” said Firdaus.

He said the drop has been due to the rise in greater awareness to scams and cheating cases.

Firdaus added that there were less reports on short message service (SMS) or email scams which usually inform the victims they had won something and later led them pay money to receive the prizes.

“These scam cases require you to supply personal details and account number to actually get the prize money. Now people don’t fail for it anymore as they know better now,” he said.