What You Need to Know about Investment Scams

What You Need to Know about Investment Scams

With the advance of technology, online investments are becoming more and more popular. Many are looking to invest to make profits. Unfortunately, many end up investing in products that promise big returns without real results. There are many scammers who tend to take advantage of this opportunity to create investment scams In Indonesia. It is very difficult to control the scams even though the government has made efforts to stop them due to its sheer volume. What is an investment scam, and how to spot them?

What is an investment scam?

An investment scam is a fraudulent scheme under the guise of investing for the purpose of raising funds. The perpetrators usually create a fake scheme that promises high returns which they typically brand as low-risk investments. Victims are usually asked to invest a certain amount of money into the scheme. This practice is illegal and the perpetrators will be punished by criminal law. There are many types of fraudulent schemes, such as programs to establish a company or foundation, new crypto coins, stocks, fake social gatherings, and so on.Ā 

Many of the fraudulent schemes are well planned. One of the common schemes is known as the Ponzi scheme, where more profits will be promised to the person who invites more referrals to invest in the scheme. Victims are also encouraged to invite friends and acquaintances to participate in raising funds so that the ‘profit’ will increase. The initial joiners are rewarded to keep them from getting suspicious. After more and more funds are collected, the perpetrator will then stop giving rewards and embezzle the funds. The same scheme can also be done under the guise of investing in new types of crypto coins or other types of products.

A warning sign of investment scams

There is no investment that has no risk and has high returns in a short period of time. There are many people who are immediately tempted when offered such an investment scheme. When a background check is done, an investment scam usually does not have a clear company track record. Usually, they also do not have an official website and there is a lack of information about these companies. For this reason, qualitative analysis is very important before making any investments. Make sure you do in-depth research about the background of the company or the assets that will be used as investments.Ā 

The second characteristic of an investment scam is none other than the promise of unreasonably high profits with minimal effort and low risk. In fact, all investments carry a risk that is directly proportional to the return. Even real investments are unable to guarantee a fixed profit. You have to do the analysis to make a profit and avoid a loss.

Investment scams also usually offer short-term profits. Victims are usually promised large profits in a short time so they are tempted to invest. Like a Ponzi scheme, victims are also asked to invite other people to join if they want to get more profit. The funds that have been collected are not explained in a transparent manner like legal investments in general.

Reasons for investment scams rise in Indonesia

Cases of investment scams are very common in Indonesia and this is not without reason. One of the main factors that make investment scams common is the number of people who are interested to invest in high profit, low risk investments. In fact, there are no such investments. For this reason, many people take advantage of this interest by building scams under the guise of ‘easy’ investment.

Many Indonesian people are not well educated about investment so they are easily tempted by this fraudulent scheme. Ignorance and lack of public scrutiny result in these types of fraud to grow. Especially with the development of the internet and technology, perpetrators can more freely create fraudulent schemes without having to meet directly with the victims. Thus, the victim is also unable to identify the perpetrator which makes it harder to lodge a case against them.

How to avoid Investment scams

After reading the above, you should become more careful when making investments. You should do thorough checks and in-depth research to avoid losses and frauds. Here are some things you can do to choose a safe and appropriate investment:

  1. Always be cautious when getting a high return investment offer
    Always make sure that you recognize and understand the sign of an investment scam. Make sure all investments that are offered to you do not have any or all of the signs above. Do your own research and ask a lot of detailed questions about the investment company who offered. If the results of your research are not satisfactory, it is better for you to choose a more transparent investment that already exists under an legal institution such as Tokenomy.
  2. Check official licensing documents as well as official product descriptions
    Legal investment is always transparent in providing important documents such as licenses from official institutions or transparent capital usage data. investment scams usually do not have these official documents and product descriptions are usually incomplete. If you find any suspicious signs, you can choose not to invest.
  3. Choose an investment that is safe and secured
    You can focus on investing in platforms that are legal and also guarantee security. If you are interested in making crypto investments, Tokenomy is one of the best choices! Tokenomy is regulated by the Financial Services and Security Act (LFSSA) in 2010 with a license issued by the International Business and Financial Center (IBFC) in Malaysia. In addition, our platform also provides many types of investments. If you want to try investing with minimal risk, you can try out the Tokenomy Earn option. What are you waiting for? Register your account today!

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