For KH friends who are still novice investors, be careful with illegal or bulging investments. Because lately, cases of illegal investment fraud are increasingly mushrooming among the public. Where illegal investment is a fraudulent scheme that offers unrealistically high returns, by taking funds from investors and disappearing without a trace. In the end, victims of illegal investments do not benefit and instead lose all their funds. Therefore, to avoid the pitfalls of illegal investment, it is important for KH Pals to know more about it, starting from the characteristics to how to avoid illegal investment.
What is Illegal Investment?
In general, investment is the activity of investing money or capital (valuable assets) for the purpose of making a profit. Investment is an attractive option for many people to achieve long-term financial goals. But behind the attractive profit opportunities, there are risks of illegal investments that can harm investors. Often victims will be asked for money to invest in a product or business that does not exist. Illegal investments offer a large and tantalizing return. That way, victims will be increasingly interested and invest without thinking. However, instead of the benefits that will be obtained, they will get losses if they fall into it. In Indonesia, there are still many people who aggressively market illegal investment products. Usually they target people who have minimal information related to investment. So, these people have the potential to be easily tempted by the huge profits they offer. This is certainly very detrimental.
Types of Illegal Investments Frequently Encountered
Illegal investments are usually offered in several types, which initially look very tempting but actually only deceive their victims. Here are some of the most common types of illegal investments, namely:
Fake Gold Investment
Gold investment is one type of long-term investment that many people are interested in. However, be careful with fraudulent investments that offer huge profits, with the condition of depositing investment funds and then exchanging them for gold. The gold offered can be in the form of gold bars or precious metals, gold jewelry, or even gold coins. But actually, the gold is fake and has no selling value. The person who made this illegal investment will sell the gold at a very low price, so that the victim will buy in large quantities.
Money Games
Money games are also a common type of illegal investment. This money game is also called a ponzi scheme or pyramid scheme which has been banned in Indonesia. Simply put, this money game offers profits that are multiple times the capital spent. But in fact, the goal is to deceive. Well, as reported by the OJK Investment Alert Task Force page, the characteristics of money games that are illegal investments and need to be aware of, namely:
- No products or services are sold. Even if there are, the products and services are sold at inappropriate prices. Everything is just a front for the business.
- Active bonuses are earned from recruitment, or members get members get bonuses.
- Passive bonuses are earned as a percentage of the invested value.
- Unreasonable pay out of profit bonus results.
- You can have more than one account, or multiple accounts.
- The company does not have the appropriate licenses.
High Yield Investment Program
Basically, most illegal investments will offer very high returns such as the High Yield Investment Program (HYIP). These illegal investments can offer promising businesses, such as technology-based businesses or coal businesses. The person from this illegal investment will usually say, the results of the business per month can be very high so that it can return capital in a short time.
Characteristics of Illegal Investment
The success and popularity of illegal investments is often driven by people’s lack of financial literacy, as well as ignorance on how to identify their characteristics.
Unreasonable Offer
The main characteristic of illegal investments is that the returns offered are unreasonably high. In addition, illegal investments are also always packaged with promises or guarantees in the form of certain instruments such as current accounts, gold, and so on. The perpetrators use these tantalizing promises to attract potential victims without providing a clear explanation of the investment model and fund management.
No Authorized Permission
Illegal investments can also be recognized by the licenses they have, especially those run through online applications. Before deciding to invest, it’s a good idea to check first whether the application has a license from BAPPEBTI and OJK. That way, you can ensure that the application has gone through a supervision process and has an official license to carry out investments in accordance with applicable rules and policies.
Gambling-like Investment System
In addition to the lure of huge profits in a very short period of time, illegal investments are usually characterized by the concept of gambling. One form of illegal investment that uses this method is online trading applications or robots. Furthermore, this type of investment will only provide benefits at the beginning of the investment. As a result, the failure rate will get higher as the invested capital increases.
Offer Bonuses for Successfully Acquiring New Users
Another characteristic of illegal investment is that it will usually ask investors to find new customers, with the lure of large profits if we succeed in attracting new customers. This usually begins with the provision of bonuses by the investor application admin. The bonus will get bigger as the number of new users recruited increases.
Pressure to Invest Immediately
Perpetrators of illegal investments often use pressure techniques to get potential victims to invest immediately. They want to make potential investors feel like they have to make an immediate decision without enough time to research and consider the investment carefully.
How to Avoid Illegal Investments?
Knowing the rampant types of illegal investments, KH pals must be careful and vigilant. If you are currently a beginner investor, it’s good to know tips on investing safely. Some ways to avoid illegal investments are as follows:
Do In-depth Research
The first way to avoid illegal investments is to do thorough research. Before investing, research the type of investment, the company running it, and the potential risks. Also, check the documentation carefully to ensure the legitimacy of the investment. That way, KH buddy can make a wise decision.
Check User Testimonials
The next way to avoid illegal investments is to check user testimonials. Try not to rely solely on testimonials on the company’s website, as these can be fabricated. Seek independent information and read reviews from users who have invested before. If there are many negative reviews or suspected scams, it’s best to avoid the investment.
Check through OJK
In addition to user testimonials, Sobat KH also needs to check through the Financial Services Authority (OJK) or other official financial bodies. OJK has data on authorized investment companies that you can verify. If the company is not registered, there is a high possibility that the investment is an illegal investment. So make sure you don’t miss this one way, huh!
Create a Clear Investment Plan
Another way to avoid illegal investments is to make a clear investment plan. Before investing, make a clear investment plan with specific goals, timeframe and risk tolerance. Choose investment instruments with measurable risks, such as time deposits, mutual funds or bonds. Avoid being tempted by promises of big profits without considering the risks you may face.
Make an Investment Agreement
In the world of investment, an investment agreement is a very important document, which regulates the approval, terms and conditions related to the implementation of the investment to be used. The investment agreement letter contains various benefits, rights, obligations, and requirements that must be fulfilled by both parties related to the investment.
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This agreement letter is used to regulate the relationship between the investor and the recipient of the capital. In addition, this document is also used to protect the interests of both parties in terms of the investment made.
KH Contact
That’s the information about the definition, types, characteristics, and how to avoid illegal investments that KH pals need to know. From the above review, it can be concluded that avoiding illegal investments is an important step to protect finances from potential fraud and losses. By being careful and wise, KH pals can develop a safe and profitable investment portfolio. Now, for a safe and secure investment, KH Buddy can consider making an investment agreement letter with Kontrak Hukum. We can help you to make an investment agreement letter easily and quickly, 100% online without face to face in just 48 hours. Guaranteed to be safe and legally valid because Kontrak Hukum’s agreement services are lawyer approved! For ordering information, visit the KH Services – Investment Agreement page. If you have questions about other business or legal needs, please consult for free at Tanya KH or via direct message (DM) to Instagram @kontrakhukum.
