KUALA LUMPUR: Afyan Mat Rawi knows a bad investment when he sees one - and not just because he is now a financial advisor. Struggling with student loans back in his university days, Afyan had invested in a get rich scheme that did anything but.
"That was the first and last get rich scheme I ever fell for," the 37-year-old Malaysian told Channel NewsAsia.
These days, Afyan counsels an average of six scam victims a month. The national average, however, is far greater.
Police across Malaysia have recorded 1,883 cases of investment scams between 2015 and Apr 2017, resulting in losses of up to US$89 million. At least US$23 million was lost to schemes this year alone.
The prevalence of get rich quick schemes came back into the spotlight after officials launched a high profile crackdown on JJ Poor to Rich.
The forex trading scheme promised a 20 per cent monthly return but allegedly caused more than US$50 million losses instead.
Police believe more than 400,000 people have invested in the scheme - including at least 100,000 from outside Malaysia.
The founders of the scheme were arrested and then released on bail.
A number of other "investment plans", often taking the shape of ponzi or pyramid schemes, have come to media attention since. Police say they are investigating.
AUTHORITIES CRACKING DOWN
Authorities say they are trying to shut down these scams as they crop up.
Bank Negara Governor Muhammad Ibrahim told media at a news conference earlier this month that local financial institutions have closed 238 accounts related to illegal financial schemes.
However, the central bank says the public is encouraging the existence of these schemes by participating in them, "driven by the sense of greed and misplaced confidence".
"If the public stops participating in these illegal schemes today, these schemes will eventually go away," the governor said.
It is a sentiment shared by Malaysia's inspector general of police, Khalid Abu Bakar.
"Bank Negara issues alerts and notices. Don't go and invest in those companies anyway," he cautioned.
"But people want to get rich quick so it's difficult... we can’t monitor everyone who's investing."
DESPERATION DRIVING INVESTMENTS?
Afyan believes there is more to Malaysians falling for these scams than just greed.
"Many of those who invest in these schemes are from the middle class or are civil servants," he says.
"The middle class struggles a lot with the economic situation such as inflation, the rising cost of goods and petrol . And at the same time, their salaries aren't going up. so they want a change - a chance for a better life, a better house, a better income. So they try to find an opportunity to get this."
Civil servants have more incentive to participate as they get loans easily, he adds.
Afyan believes while there is enough legislation in place, authorities need to do more to enforce them and impose harsher penalties against scammers so they are less brazen.
However, he concedes that many Malaysians lack the financial know-how to distinguish between a scam and a proper investment too - so he is calling for there to be a compulsory "financial literacy" component at local universities.
Statistics show that certain sectors of the public could greatly benefit from some kind of financial management guidance.
A 2015 Bank Negara survey found that three out of four Malaysians would find it difficult to raise even RM1,000 in an emergency.
Less than a quarter from that same survey had any kind of investment.
Meanwhile, the central bank is offering some broad guidelines on how to spot a dubious investment.
"If you look at unit trusts, their returns are generally around 5 per cent to 6 per cent (each year) and these are the best portfolio managers," Mr Muhammad said.
"The very good ones could offer 6 per cent to 7 per cent returns. So any numbers beyond this rate cannot be true."