3 Types of Financial Scams You Should Know

7th June 2017
financial scams image of a mouse and keyboard with a "get me out of here" key

In recent years many of us in Brunei may have heard of or even been targets of financial scams. These scams commonly referred to as “Skim Cepat Kaya” or Get-Rich-Quick schemes are becoming more prevalent. But not all scams promise you great riches; they could simply trick you! It could be spam in our email or that weird phone call from a number from out of state or even dubious so-called “investment opportunities”. Whatever it is, these people are after one thing: your money and it’s highly likely you won’t see it again once you give it to them. As the age-old saying goes: prevention is better than cure and the prevention for financial scams is learning to spot them before they harm you and those around you.

So what are Financial Scams?

Financial scams have different names such as fraud, cheating and trick. Put simply, they are some sort of plan created to con unsuspecting victims to hand over their savings or anything of value. Usually, the victims are the greedy, thinking they could get a big payoff, or the desperate; those that are in a tight spot after realising they did not plan for big life events such as or retirement are particularly vulnerable. But there are many victims who are simply not aware of the signs of a con. This leads to them being easily manipulated by promises of massive returns or other gains!

Financial scams come in many forms but this post will cover:

  1. Phone and Email Scams
  2. Investment Scams
  3. Social Media Scams

Learning about these kinds of scams will make you less likely to fall prey to scammers and allow you to be more vigilant when conducting your due diligence.

What are the risks?

On the surface, you will lose your money with little to no chance of recovering it unless the con-artist is caught; even then it depends on whether the money is still with them or not.

More seriously, if your personal information was given, your identity could be stolen. They may use your identity to commit fraud and potentially human trafficking, smuggling or illegally entering other countries. You could run into trouble with the authorities for crimes you did not commit!

1. Phone and Email Scams

While at work, you receive a call; “Huh, an unknown number” you say to yourself. Subconsciously you pick up, “Hi, is this <your name>?” says the lady on the other end. You acknowledge and she tells you there’s a problem with your bank account and you need to give her your credit card number to fix it. You are about to give the card number when you suddenly realise and stop. Why would you need to give credit card details to solve an account issue?

Even in Brunei, we get the occasional random calls from numbers from Indonesia and the Philippines. Personally, I have had these calls for a period of time but have never entertained any of them. There have also been calls from local numbers as well and these are harder to filter out. These calls will usually grab your attention with something like a problem or a prize and then try and get you to divulge personal information and/or make payment to them.

So how do I know if it’s a scam?

Scammers usually won’t persist unless you already gave them attention by picking up the call. To them it’s a game of numbers and seeing who takes the bait. There are many stories they will spin to trap you:

  1. Won a prize and you need to give them your personal details to claim.
  2. Nigerian prince who will give you some of his wealth if you send him some money to cover some expenses.
  3. Your “bank” calls and says there’s a problem with your account and that you need to give them your credit card details to fix.
  4. A “charity” may call and ask for donations. Usually complete with a sob story.
  5. There have been cases where they posed as government organisations such as the Singapore Police to get victims to pay “fines”.
  6. Scammers have been able to tap into caller ID to appear legitimate.
  7. Sophisticated scammers can create believable websites for banks and government organisations for phishing your personal details.

What can I do about Phone and Email scams?

If it’s an email scam, you should block the address and delete the email. Sometimes these emails may also contain viruses when opened.

For phone scams, it’s a little trickier since there’s an element of conversation between you and the caller. Reputable organisations such as banks and government agencies will not ask for your credit card numbers or any sensitive information unsolicitedly. You should take precautions to protect yourself in these events:

  • Ask for the caller’s name and contact number. And tell them you’ll call back in a bit.
    • Check online or in a phone directory for the organisation’s number.
    • If it matches, call back and ask for the person who called you.
  • If it is a persistent out-of-state number, you should consider blocking that number.
  • Check the email sender address. There are usually small details they cannot duplicate.
  • Never reply to unsolicited emails asking for personal details.
  • Be vigilant when you see popups from your browser like a recent Tech Support scam.
  • Always check if the website you’re visiting through an email is authentic. If it looks weird, do not put in any details.
  • Report to the police if you are a victim.
  • Call your bank to terminate your credit or debit card if it has been compromised.

2. Investment Scams

So one day you hear of this amazing opportunity: all you have to do park your money in this investment called “Not-a-Scam Funds” and you can get an amazing 20% return in just a month! And to prove it to you, you can start with a small amount first. After a month, sure enough you get back that amount so you put in more from your savings. Suddenly, after a few months, the paycheck stop coming in. You can’t contact the company representatives at all. What happened?

This scenario is very often played out for investment scams, the scammer sets up a believable and usually legitimate investment front and gets people to “invest” in them for amazing results. There are two main types of investment scams:

  1. Ponzi schemes
  2. Pyramid schemes

What’s the difference between Ponzi and Pyramid schemes?

Generally both results in the same thing: the person at the top profiting. The main difference is how they get the money out of you.

A Ponzi scheme will simply ask people to invest and the money trickles down the chain. Referrals will get a cut from the “invested capital” of the people they refer and so on. It may also be marketed as investing in something valuable such as gold, silver and other commodities.

A Pyramid scheme, however, requires people to signup for a membership tagged with a hefty price. This membership fee allows them to sell “products” but the money is already made from the fees. A percentage of these fees are paid up the chain to the top.

In both cases, the referrals make the base of the pyramid up to a point where there are no more people who sign up, causing the scheme to collapse.

So how do I know if it’s a scam?

Because these scams are targeted to incite human greed and desperation, they usually spin their stories around these kinds of situations. However, there are red flags you can pick up from the way they pitch it:

  1. Guaranteed returns that’s too good to be true in a short time period.
    Unless they’re predicting the future, it’s unlikely you can get this guaranteed returns of higher percentages (10%++) consistently.
  2. Roundabout or “secret” investment strategies.
    They should at least be able to explain how they make money and what they invest in.
  3. Using terms like “significantly better than market rate” and “zero risk”.
    All investments carry risk of losing money, low risk doesn’t mean no risk. While some investments can perform better than the market, consider if there are other red flags to what they’re selling.
  4. They could get aggressive when challenged.
    The scammers may show signs of aggression like blocking out people with many questions.
  5. Need to take action “Now”.
    They do not want to give you time to consider or research into them.
  6. “Brainwashed” people persistently trying to get you to join.
    If they’re desperate for a referral, it’s easier to spot.
  7. Guaranteed payments stop after a few months.
    Probably too late by now but should stop you from putting more in.
  8. No timeline for exit.
    Why buy in if you cannot get out? Even fixed deposits have a timeline where you can withdraw.

There are also many recent cases near Brunei such as the JJ Poor-To-Rich clampdown in Malaysia where about 400,000 people were scammed! That’s nearly the whole of Brunei’s population for comparison!

What can I do about Investment Scams?

If, from the red flags, you believe an individual or company is not as legit as they seem, you should:

  1. Do your research.
    Check online if the company is really what they seem. Note that they might have created a website to make it more believable.
  2. Do not be pressured to join or invest.
    They will usually want you to take action almost immediately. Better to lose the opportunity rather than lose all your money.
  3. If you have been cheated, report the case to your nearest police station.
  4. You can also report to the Monetary Authority of Brunei Darussalam if you suspect a fraudulent investment product.

3. Social Media Scam

Nowadays, social media is all the rage especially in Brunei which was found to have the highest social media usage in the ASEAN region! The ability to be up to date with local and international happenings at the touch of a finger and on one page is amazing. Whilst social media has enriched our lives, they also open another portal for opportunistic scammers to try their luck.

I’ve encountered many friends on my Facebook liking and sharing giveaways and prize draws and wonder to myself: How many of them are legitimate? In recent times, there have been quite a few cases where social media was used for cheating or even extortion. So does that mean you can’t win that shiny new iPhone from liking and sharing that post? Well, not really; what it means is you should be wary even though the giveaway is completely legitimate.

Beyond prize scams there are also love-scams where victims end up being cheated into smuggling drugs or persuaded into performing obscene acts on webcam and subsequently filmed and extorted. Due to the nature of being able to create and delete online profiles instantly, perpetrators are also less likely of being caught.

So how do I spot a scam?

Like phone and email scams mentioned above, there are a handful of red flags that tell you if a contact seems dodgy:

  1. They want you to make a payment to claim the prize.
  2. Somebody you don’t know adds you on Facebook. If their pictures are risqué and suggestive, extra red flag points there.
  3. They want to contact you via Whatsapp or other messaging services and ask for your phone number.
  4. There’s also urgency for specific actions such sending a validation code. For example, a recent online gaming credit scam where the victim’s phone bill was charged.

What can I do about Social Media scams?

All the things listed above are applicable to these kinds of scams too. In addition to taking precautions not to disclose any sensitive data, you should:

  1. Not “add” people you don’t know as your friend.
  2. Never take conversations beyond that particular social media platform.
  3. Report, Block and Delete suspicious users.
  4. Never send money to claim a prize.
  5. Report fraudulent social media posts to the site owner.


Every once in a while we come across news on someone being cheated out of their life’s savings in some way or another. Everyone should remain vigilant in spotting telltale signs that a certain “opportunity” is in fact a trap. The sad thing for many victims is that when they realise, it is usually too late to recoup their losses.

The most important action anyone can take in this situation whether victim or target should be to report to the:

  • Royal Brunei Police Force, and
  • Monetary Authority of Brunei Darussalam if it was investment related.

Regardless of what amazing new opportunities there are, be sure to look at them properly, ask a lot of questions and as we have heard before:

“If it seems too good to be true, it probably is.”

– Unknown

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