Recently, there has been a spike in fraudulent investment cases among the public. Fraudulent investments, also known as illegal investments or Ponzi schemes, refer to fraudulent practices in the investment world where unauthorized individuals or entities offer investment opportunities that do not actually exist or are not working properly.
The main aim of fraudulent investments is to attract money from investors with promises of large profits, but in reality, the money is not legally invested or used to generate the promised income.
Therefore, for those who are new to the world of investment, it is very important to be careful and carry out thorough research before making an investment decision in order to avoid becoming a victim of fraudulent investment practices.
So, to better understand what fraudulent investment is, its characteristics, examples of methods, and ways to avoid it, see the following review.
What is fraudulent investment?
In general, fraudulent investment is a form of fraud that involves collecting funds from individuals with false promises regarding investment. The first step in a fraudulent investment scheme is when the perpetrator asks for a sum of money to be invested in a business or project that does not actually exist.
Fraudulent investment actors tend to offer very large profits with minimal initial capital and a short payback period. They often also use the names of other institutions or organizations to attract the interest of potential victims.
Fake investment offers can be found in various forms of media, such as text messages, emails, or websites. Often, these offers are addressed to multiple people.
What are the characteristics of fraudulent investments?
Fraudsters in fraudulent investments use cunning and effective tactics to embezzle your money. While some of these tactics may seem convincing, there are indicators that can help you spot fraudulent investments. The following are some of the characteristics of fraudulent investments that are worth knowing, namely:
1. Offering Unreasonably High Profits
The main characteristics of illegal or fake investments are promises of unreasonable and very high profits. In addition, this kind of investment is often accompanied by claims or guarantees that refer to certain instruments such as savings, gold, and so on.
The aim is to make potential investors feel confident and interested in investing their capital. On the other hand, legitimate investments are not allowed to offer guarantees or promises of instant or multiple profits.
Furthermore, legal investment will provide guidance and provide investors with an understanding of how to optimize their profits through instruments and capital that are in accordance with the specified time period.
Therefore, if you come across an investment offer that sounds too good to be true, it is important for you to increase your vigilance and be careful before getting involved.
2. The Platform Does Not Have Official Permission
Apart from the characteristics of offers that promise unreasonable profits, illegal or fraudulent investments can also be recognized through the permits they have.
This is especially relevant in the context of investments made via online applications. Before you decide to invest through an online application, it is very important to first check whether the platform has permission granted by the Commodity Futures Trading Supervisory Agency (BAPPEBTI) and the Financial Services Authority (OJK).
In this way, you can ensure that the application has followed strict monitoring procedures and holds official permission to carry out investment activities in accordance with applicable regulations and policies.
By using applications that have been approved and supervised by BAPPEBTI and OJK, you can reduce the risk of being exposed to fraud. On the other hand, if you use an online application that does not have permission from these two financial institutions, you could be caught making an illegal investment.
3. Provides benefits only at the beginning
Fraudulent investments often offer large profits in a short time. They may promise very high returns in a very short time. This is contrary to legitimate investments, which tend to have more moderate risks and returns over the long term. Investments that only promise initial profits without consideration of risk are a warning sign that you need to watch out for.
4. Offer a bonus if you successfully get new members
Furthermore, illegal or fraudulent investments often characterize themselves by offering bonuses to investors who succeed in bringing in new users.
Furthermore, this practice started with online application administrators giving bonuses to investors who successfully recruited new members. The size of the bonus can increase as the number of new members successfully recruited increases.
Examples of fraudulent investment modes
Currently, there are various types of illegal or fraudulent investments spread throughout society. Therefore, it is important to know examples of fraudulent investment methods so as not to get involved in them. Here are some examples of fraudulent investment modes, including:
1. cooperative-based
One type of illegal or fraudulent investment in society often takes the form of unauthorized cooperatives.
Illegal or fake cooperatives can be recognized by the following characteristics:
- Offers unreasonable profits.
- Does not have legal recognition from the Ministry of Cooperatives.
- Providing loans to individuals who are not members of the cooperative.
- Often, perpetrators pretend to be cooperative administrators, even though in fact they have no
- connection whatsoever with legitimate cooperatives.
2. Arisan disguise mode
Apart from that, there is another type of fraudulent investment known as social gathering fraud. This mode involves the perpetrator inviting a number of people to join a social gathering investment group.
The basic principle of this fraudulent investment is that each group member is required to deposit a certain amount of money every month.
However, in reality, the money collected is often misused by one of the group members, who then runs away, and the money is not distributed according to the initial agreement.
Bodong social gatherings can include various types of investment instruments, such as cash, gold, cars, or other valuable assets. This makes it even more important to always be careful when investing and ensure that each investment scheme meets applicable legal requirements.
3. Online Investment Without OJK Permission
Finally, there is a type of illegal or fraudulent investment that often deceives many people, namely investment through online applications without permission from the OJK.
This kind of illegal or bogus investment often promises ease of transaction and unreasonable profits. Some examples of illegal or fraudulent investment instruments include shares, mutual funds, gold, foreign exchange, or even P2P lending.
However, even though it offers a variety of instruments, this investment does not have official permission from the OJK. As is known, one of the characteristics of an illegal or fraudulent investment is the absence of official permission from a financial institution.
Therefore, if an online investment does not have permission from the OJK or BAPPEBTI, then there is reason to suspect that it could be part of an investment-related fraud scheme.
How to Report Fraudulent Investments
Even though the characteristics of fraudulent investments are quite clear, there are still people who fall into the trap. If someone around you is caught in a fraudulent investment case, you can provide assistance by reporting it to the competent authorities. Here are the steps for reporting fraudulent investments:
1. Collect evidence
The initial stage in the process of reporting illegal or fraudulent investments is collecting strong evidence. Some types of evidence that need to be collected include transaction records and documents of agreements that were not fulfilled.
Apart from that, joining other victims can also strengthen the evidence you have and allow you to report the case together. In this way, you can increase your chances of getting justice when dealing with fraudulent investments.
2. Use the help of a lawyer and report it to the OJK
The next step in reporting illegal or fraudulent investments is to take legal action with the help of a lawyer.
This is because legal action against violations and losses often requires the assistance of a legal professional.
Be sure to choose a lawyer who has special experience and expertise in handling investment fraud cases to ensure that your legal efforts have a better chance of being successful.
How to avoid fraudulent investments
Fraudulent investments or investment fraud schemes can be financially detrimental and damage a person’s financial future. Therefore, it is important to understand how to avoid fraudulent investments in order to protect yourself and your finances. Here are several ways to avoid fraudulent investments, including:
1. Do in-depth research
The first step in avoiding illegal or fraudulent investments is to conduct in-depth research. Before you decide to invest, take the time to do thorough research about the type of investment you want to get involved in, the company that manages it, and the potential risks.
Apart from that, also check the documents related to the investment carefully to ensure their validity and security.
By avoiding illegal or fraudulent investments, you can make wiser and more informed investment decisions.
2. Don’t be easily tempted by big profits
The public should be wary if there are parties who promise levels of profit that far exceed the interest rates usually provided by banks. Additionally, if there is a claim that the investment has no risk of loss, that should be a warning signal.
3. The platform has been officially registered with the OJK
Before you invest through any platform or company, make sure that the platform has been officially registered with the Financial Services Authority (OJK) or the applicable financial supervisory agency in your country. Official permission from financial authorities is an indication that the platform complies with the regulations and rules set to protect the interests of investors.
4. Report immediately
The public is expected to immediately report any offers to collect funds and manage illegal investments or acts of theft to the Investment Alert Unit (SWI) or to the authorities, such as the police.
Beware of Bogus Investments Under the Guise of Crypto Investments!
Bogus investment under the guise of crypto investment is a serious threat in the world of digital finance. Basically, it is very important to always be wary of fake investments that use crypto as a fraud tool, among other things, to avoid financial losses. Below are several possible fraudulent investments under the guise of crypto investments that you need to know, namely:
1. Pig butchering scam
This pig butchering scam involves investing in crypto on fake platforms that offer unreasonable returns. The victims will be manipulated into injecting their capital, and their funds will run out in a short time.
2. Money Game Scheme
The money game scheme is based on the concept of “dig one hole, cover it with another hole.” Everyone, especially those who have been around for a long time, may be happy that there are still people getting caught up in this con game.
3. Crypto-Based Ponzi Schemes
Crypto-based Ponzi schemes are a form of investment fraud in which fraudsters offer investments in cryptocurrencies or crypto projects that do not actually exist or are not operating properly.
Come on, invest in crypto easily and safely on Indodax
So, now you understand what fraudulent investment is, its characteristics, examples of methods, and how to avoid it.
Once you understand the dangers of fraudulent investments, you can now invest in crypto safely at Indodax because Indodax has been officially registered with the Commodity Futures Trading Supervisory Agency, or BAPPEBTI.
As for how, first, you need to download the Indodax application, then register and log in to your Indodax account.
Next, you can start by verifying your account before you can deposit funds and start crypto trading activities on INDODAX.
After successfully passing the account verification process, the next step is to transfer funds to your INDODAX account and choose the type of crypto you want to trade.
Then, after selecting the crypto you want to trade, you are ready to start trading. You can determine the buy or sell price according to your preferences or use the current market price.
Of course, the process above is very easy to do, right? What are you waiting for? Let’s start investing in crypto at INDODAX now!
Conclusion
In conclusion, investing is a very important decision and should be done carefully. It is important to always be wary of investment offers that are too good to be true and to conduct in-depth research before investing your money. Fraudulent investments, including crypto-based Ponzi schemes, can harm many people, and it is important to avoid them.
Therefore, it is best to start from now on to share information and educate other people about fraudulent investments. By sharing knowledge about how to identify illegal or fraudulent investments and providing correct information to others, we can help protect them from potential financial loss.
As is known, in the world of investment, knowledge is power, and together, we can reduce the risk of falling into the trap of fraudulent investments.
