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To see through investment scams - Check before you invest
Spot an Investment Scam

4 min. read

Find out how you can spot an investment scam and what you can do to avoid falling prey to one.

Key takeaways
  • All investments carry risks. Always check before you invest!
  • Check for red flags. Be wary of opportunities that offer high returns at little or no risk.
  • Check that the company and its representatives are regulated by the Monetary Authority of Singapore (MAS).


Scammers use sophisticated tactics to get you to part with your money. There are red flags you can watch out for to steer clear of investment scams.

High returns at low or no risk

Be wary when you encounter an investment opportunity that claims to guarantee or protect your capital while promising high returns. The greater the promised investment returns, the higher the risks should be. Many investment scams use lucrative promises to lure investors in.

Pressure tactics

  • "Limited time only! Invest before it sells out!"
  • "Special rates for first 50 investors. Don't miss out on this golden opportunity!"
  • "More than 2,000 people have invested - what are you waiting for?"
  • "Invest today and get extra 10% credit with many other benefits."

Limited offers, timed gifts or rebates, are common tactics in investment scams to rush you into commiting your money.  

Make sure you fully understand what you are buying into instead of focusing on the carrots dangled.

Offer of commissions

Legitimate investment schemes generally do not offer commissions to investors for referrals.

Investment scams use such incentives to encourage existing customers to bring in their friends and associates to quickly enlarge their investor base.

Fictitious track records

Investment scams may claim to have many years of experience, multiple accolades or simply large investment profits to gain trust.

Some use testimonials from "satisfied customers" to shore up their credibility.

You should approach claims with healthy scepticism. Where possible, verify the claims with an independent third party.


Some investment scams may even claim to be regulated by the relevant authorities to mislead you.

Confirm such claims by checking the resources on the Monetary Authority of Singapore (MAS) website.

Remember, dealing with an unregulated entity means giving up the safeguards offered under the laws administered by MAS.  


Do not be too quick to believe everything you are told. Verify information provided by the entity about themselves or the investment opportunity, such as the background of representatives and the entity's track record. 

It is also important to ask the entity as many questions as you need to fully understand the investment opportunity. If it is unable to answer or avoids answering any of your questions, be wary.

See also: Dealing with unregulated persons

If you suspect that you are a victim of scam, please inform your bank and file a police report immediately.

Tell your family and friends about investment scams so that they do not fall prey to them.

Remember, if an investment sounds too good to be true, it probably is.

Last updated on 15 Aug 2023