Must know! various forms of investment fraud

‘Investment is risky. Investors should carefully consider before investing.’
It is a statement that addresses the investors of all times. However, even if investors have a thorough investment consideration, we still can lose from investment. Therefore, is an important reason that investors must study and understand the risks of an investment well. In addition to the risk of an investment that gives us the opportunity to lose. There are also various forms of fraud from criminals that may cause a big loss. Which investors need to keep track of and know those scams. This article will answer the questions about fraud that is hidden with investment solicitation. Because now a day, the word "investment" is interesting for people of all ages, professions. Resulting in easy persuasion, as well as the temptation that is easily deceived.

What type of investment fraud schemes out there?

1. Ponzi Scheme  Is a scam that has long been and has developed to be more complex in the modern era. By obtaining capital from members who are victims. They are often motivated by high returns and often claiming to invest in profitable business. But does not give clarity on the type of investment. (Because most don't invest in anything) But want to find a lot of new members to bring money from new ones to pay for the old ones. And will do this repeatedly like a chain. Finally, at the point that the business didn't catch money Will begin to postpone the compensation and finally, this Ponzi scheme will come to an end.

Type of Ponzi Scheme

  • Raising funds to set up the company into the stock market. It is a trick to participate in shares in the company. By pretending that the company plans to be listed on the stock market. Most often then claim to be listed on the foreign stock market, to make it difficult to check. And want to find enough members first, so that they can persuade others to invest.

  • Online Ponzi Scheme is a scam on social media such as LINE, Facebook. By persuading join Ponzi scheme as a package. Interest payments are paid every week and when the circle is large enough will close it and then flee away.

  • Selling dream trips: Is creating a network business that brings cheap travel packages as a lure. By pay the first entry fee and pay monthly membership fees to have the right to purchase travel packages. Including tricking people to buy very cheap travel packages than usual to motivate people to purchase. Then took the money and escape

  • Suggestion to consider whether or not that investment could be a Ponzi Scheme. It will often look like having a 'guaranteed' return that is too high to be true, like 6% - 8% per month or 72 -96 per year without mentioning the risk or loss at all. However, at present, more realistic returns are offered, such as 10% -12% per year. Making the conclusion that this return is more than normal or not is more difficult. Therefore, having to consider the source of investment where it invests in, is it clearly stated or can be checked. In addition, there may refer to people who have invested before. Those references are not real, and they already prepared to answer our questions and will energetically persuade us to jump to invest. Which may be a persuasion in the group of friends or relatives causing credibility and considerate.

2. Engage in investing in financial instruments (Without license): To persuade to invest money in Thai stocks, Foreign stock, Foreign derivatives, Foreign exchange rates by unlicensed individuals or businesses. Examples of scam in this format, such as

  • Invest in foreign exchange speculation (Forex): Is a solicitation to invest in the international exchange market. Which shows high return making many people to believe and jump to invest.By the Fiscal Policy Office (FPO), giving the explanation of Forex in Thailand as follows
  1. Investors who conduct transactions in such manner (Forex trading) can be done manually. But the investor is responsible for the risk of damage from speculative losses of foreign exchange rate by yourself.
  2. At present, there is no license for anyone to do business regarding foreign payment factors under the law on exchange rate control
    in the form of foreign exchange speculation. Therefore, if there is any person persuade to invest in such manner, presumably you may be fraudulent and may be damaged.
  3. In the case of persuading people to invest in foreign exchange rate speculation. By the said solicitor, whether they are regular persons or juristic persons don’t have license to engage in business related to Foreign payment factor under the law on exchange control. Such action is an offense of borrowing money that is a fraud for people under Section 4, paragraph two of the Emergency Decree on Borrowing of People Fraud, 1984.
  • Setting up as a guru to teach courses on Forex trading through social media with a high amount of tuition fees, without the expected results and cause loss.
    In addition, tracking the wrong person in the online world is difficult.

Suggestions when making investment decisions should refer to information from companies that are properly certified, under the supervision of the SET Bank of Thailand (BOT), The Securities and Exchange Commission (SEC), or the Office of Insurance Commission (OIC). Which is an official regulatory agency. This style is safer because if any investment advice is wrong, investors can file complaints to regulatory agencies.

We all need to be careful. In order not to be a victim of criminals.
Because the scams are constantly changing. We should keep up with the news and be mindful. Don't believe anything easily. Especially if it is a proposal that is 'Too good to be true” should doubt first and note that it should be a hoax. In addition, if there is any doubt that the investment considered to be a Ponzi scheme or illegal? Can ask for additional information with the relevant agencies as follows

  • Office of the Consumer Protection Board  Tel. 1166

  • Department of Special Investigation (DSI) Tell. 1202 

  • Department of Business Development Tel. 1570

  • Financial Services for User Protection, Bank of Thailand Tel. 1213

  • The Ministry of Finance's informal financial notification center Tel. 1359

  • The Securities and Exchange Commission (SEC) Tel. 1207


By :  Nipapun Poonsateansup  CFP® Dependent Financial Planner