Characteristics and How to Avoid Fraudulent Investments
 

Fraudulent investment refers to investment activities conducted through sources or partners that are not registered with the regulators overseeing the investment sector. In Indonesia, the regulators may be the Financial Services Authority (OJK) or the Commodity Futures Trading Regulatory Agency (BAPPEBTI), depending on the type of commodities being offered.

The methods of fraudulent investments can vary, ranging from fund deposits, equity crowdfunding, security crowdfunding, illegal MLMs, money games, to Ponzi schemes. All these methods are prohibited by OJK and should be avoided if someone offers them to you. Below are some characteristics of fraudulent investments and how to avoid them:

1. Lack of Legality
   
   Companies offering fraudulent investments typically do not have official licenses from the relevant authorities. You can check registered companies through OJK or BAPPEBTI websites. Some fraudulent companies may even display the OJK or BAPPEBTI logos on their websites, though these could be fake. Ensure to verify the license number provided and confirm the company is registered and active.
   
    

2. Offering Unrealistic Profits
   
   Profits that are too high or too consistent may signal that the company is running a money game or Ponzi scheme. Investment returns in the capital markets are usually around 10% per year, corresponding to the risks involved. If the returns offered are excessively high or stable, it could be a warning sign.
   
    

3. Unclear Assets and Management
   
   Fraudulent investment companies often lack clear assets, either in terms of the investment assets offered or their physical office. Many fraudulent companies rely solely on websites or social media for marketing and do not have official offices. Make sure to check the office location and company data before deciding to invest.
   
    

4. Using Public Figures’ Names
   
   Fraudulent investments often use the names of public figures, especially in fund deposit schemes through platforms like Telegram. In this scheme, investors deposit money to be managed by unclear parties. Ensure to verify the public figure’s official social media and check the authenticity of the links used. Additionally, fraudulent companies may manipulate the names of legitimate companies to convince investors.
   
    

5. Doubtful Transparency
   
   Some fraudulent investments use trading platforms to monitor investments, but suddenly, these platforms become inaccessible, or investors face margin calls. Be cautious of companies that do not provide clear transparency regarding the investments you make.
   
    

6. Questionable Company Track Record
   
   Fraudulent companies often have a poor or untraceable digital track record. Legitimate companies usually have accountable social media accounts and websites, along with transparent financial reports.
   
    

7. Unclear Products Offered
   
   Fraudulent investments often only explain the type of products offered without providing clear documents, such as financial reports or whitepapers. Always make sure to ask for the necessary documents to understand the investment products being offered.
   
    

How to Avoid Fraudulent Investments

Here are some tips to avoid fraudulent investments:

• Do not easily trust advertisements you receive, whether through SMS or influencers on social media.
   
• Regularly check the list of fraudulent investments published by OJK, as they continue to update the list of blocked websites.
   
• Recognize the modus operandi of fraudulent investments, such as money games or Ponzi schemes, and understand their characteristics.
   
• Conduct thorough research on the investment company, including the address, physical office, and digital track record.
   
• Understand the investment instruments you choose and make sure you know how they work before deciding to invest.