Malaysians Blame Illegal Investment Schemes on High Living Cost

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Lured by a supposedly quick and easy way to increase income.

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The rising cost of living is believed to be among the reasons for employees, especially those who are Employees Provident Fund (EPF) contributors, to be vulnerable to participating in various investment schemes which are illegal or dubious in nature.

A civil servant who only wished to be known as Azrul, 33, said EPF contributors were the easiest target group to approach, and they eventually get caught up in investment schemes that supposedly yield lucrative returns.

The government agency staff from Sepang admitted he was among the fraud victims of a dubious investment company, and lost about RM5,000, three years ago.

“If we look at their approach, they are targeting contributors because we have savings (money) in EPF. As a civil servant, after our service has been confirmed, we can easily withdraw money from the EPF and this was the facility which I used,” he told Bernama.

Azrul said he tried to find a quick and easy way to increase his income and withdrew RM5,000 from his EPF account to join a scheme introduced by his friend, which promised to double his investment.

“My salary as a civil servant is not high, at the time, I was looking to add to my income because I needed to pay rent for my home, to eat and drink, purchase petrol for my motorcycle and intended to get married. When I saw my friend talking about the scheme and investing in it himself, I became confident about it.

“Although the amount (I invested) was not too big, unfortunately, the money got burnt just like that…the investment company closed down and the agent disappeared. My friends and I then realised we were duped…I feel sad because I used my EPF savings for a useless investment,” he said.

Another contributor, known only as Nurfadzilah, shared a similar opinion with Azrul that EPF contributors, especially the younger generation, were very enthusiastic about investing their EPF money to generate profitable returns.

“The incident occurred about six years ago, at the time when (multi-level marketing) MLM-based investment schemes were all the rage in the Klang Valley. I almost withdrew some money from my EPF account to join the scheme as I was impressed by the luxurious lifestyle of those who had invested in it,” said the 34-year-old who works as a graphic designer in a private company.

According to Nurfadzilah, her plan to participate in the investment scheme got delayed because her EPF money could not be withdrawn, due to not meeting the proper withdrawal requirements.

“The (investment) agent asked for some money and wanted me to pay them the amount before a deadline if I wish to receive returns from the investment as promised.

“However, my EPF money could not be withdrawn before the deadline. I later learned that the company which introduced the investment scheme was raided by police because of complaints from people who failed to get their investment returns, and even lost their capital,” she said.

Meanwhile, a unit trust consultant (UTC) from an agency, Mohd Azmer Md Zainol reminded contributors to always check on the background of each financial or investment agency through Bank Negara Malaysia (BNM) or related parties, before making any investment.

He said contributors should learn about or seek investment channels which were allowed, for example, a unit trust management company (UTMC).

“UTMCs are monitored by the Securities Commission (SC) of Malaysia, and allowed to operate by BNM and the Ministry of Finance, and our investment money will be protected and guaranteed by trustees appointed by the UTMC,” he said.

In addition to choosing a legitimate or registered financial company, he said contributors should also take several measures before making any investments, such as researching about the financial performance of an investment firm.

Mohd Azmer said that contributors should also ensure the real purpose of the investment, as they also faced various risks in investing.

“Every investment takes a certain amount of time for us to get returns or profit…it’s not as fast as promised through get-rich-quick schemes,” he added.