KUALA LUMPUR (Oct 23): The Securities Commission Malaysia (SC) has established an internal task force to focus on investigating and taking enforcement action against individuals behind financial scams.

SC chairman Datuk Syed Zaid Albar said the SC recently established the internal task force to focus on investigating and taking enforcement action against individuals behind these scams.

In his speech at the SC's vrtual “InvestSmart Fest” themed "Silap Labur Duit Lebur", Syed Zaid said the SC had observed an increase in incidences of scams, having received 370 queries and complaints about illegal investment schemes up to end-September this year, compared with 317 for the whole of last year.

According to him, these scams usually promise extremely high returns with little or no risk.

According to him, the police's Commercial Crime Investigation Department had reported that Malaysians lost a total of RM769 million to scammers over the last three years.

“The report also noted that online scams were one of the most rampant among the scams perpetrated,” he added.

He also said for the first six months of this year alone, Malaysians were reported to have lost a total of RM914 million to scams.

He said of late, there had been a rise in “clone firm scams”, where fraudsters impersonated legitimate licenced entities to dupe investors into believing that they were investing with the legitimate entities.

He also highlighted that the SC's findings show that the promotion of such scams is commonly carried out via social media channels, with the use of WhatsApp and Facebook being the most prevalent.

“Investors who receive offers of investment opportunities through WhatsApp messaging or Facebook channels should exercise caution. I would like to advise investors to always verify the individual and entity’s status with the SC before investing their monies in any investment schemes,” he said.

He also said the SC believes that investors’ vulnerability to scams may be caused in part by their unrealistic expectations of returns from investments.

“Our survey earlier this year shows that a majority of investors in Malaysia have unrealistic expectations of 24% to 30% returns per annum on their investments. Please remember that if the investment proposal is too good to be true, then it probably is [a scam],” he said.

He also noted that investors’ vulnerability was also compounded by their search for yields in the current low-interest-rate environment.

“We urge investors to also play their part by coming forward to provide information to the SC ... if they have been approached by any persons offering these schemes,” he added.