Tag Archives: Scams

Man reaching for money bills under a box representing scams

Scams: Why do we fall for it?

A conversation with Raymon Ram, Founder & Lead Consultant at FAFE Management Consultancy and Certified Fraud Examiner, discussing the motivations that lead to falling prey to scams.

With the recent collapse of the 20% – ROI JJPTR scheme and the arrest of Johnson Lee, it would seem that the JJTPR episode is drawing to a close. However, the plot isn’t over by a long shot. Prior to Johnson’s arrest, media interviews with existing investors of the scheme seem keen to reinvest when Johnson stated the development of a new JJPTR plan, promising 35% ROI rates despite claims of losing RM500 million to hacking.

The JJPTR scheme is not the first, nor will it be the last case of fraud and scams. More of such cases will only continue in different forms – repackaged under different names – so long as the various factors that not only motivate fraudsters to commit the crime, but also ensure potential investors facilitate their own victimhood, are left unaddressed.

Based on his experience as a Certified Fraud Examiner and an advocate against Economic Crime, we interviewed Raymon Ram to elaborate on the factors that have investors falling prey to fraud and its ramifications.

Planting the Seeds of a Scam
Apart from having a specific skill-set to pull off a successful fraud, it takes a willingness to deliberately target, deceive and deprive another person’s means of living. So what are the psychological strategies that allow scammers to do what they do?

According to Raymon Ram, scammers often target both internal and external influencers of a person’s decision to take financial risks and make an investment.

“The internal influencers here are “Hope” and “Greed”. There is always hope that things would work out for the best and while such positivity is good, it could backfire for the worse when one does not take a calculated risk. Whereas greed is a trait of always wanting more and not being satisfied with things as they are. This presumably is the reason one looks at gaining better returns in one investment compared to lower promise of returns in others.”

On the other hand, external influencers – such as uncertainties of the current economic climate, rise of the cost of living, inability to maintain lifestyle, living beyond one’s means and financial constraints that may be due to gambling habits or at times the sudden loss of financial support – all play a part in a person’s decision to invest and scammers prey on these hopes, greed and fears to get their target’s buy in.

Creating Our Own Victimhood
The importance of educating oneself with financial literacy programmes and the basics of investment is never more evident in the face of the thousands of get-rich-quick schemes that are being peddled around.

Besides the internal and external influencers that fraudsters prey on to manipulate their targets – or perhaps because of it – people also fall prey to scams due to the inability to understand the full mechanics behind the investment scheme. An accompanying factor propagates this lack of understanding lies in trusting the endorsement of products by public figures or celebrities without doing their own research. Thus, setting themselves up for disaster by being unwilling to look closely at the details.

“An example would be Bernie Madoff, who scammed billions off intellectuals, professionals, celebrities, politicians and regular everyday Joes alike. People turned a blind eye to the mechanics behind the scheme or even legitimacy of what was happening due to the background of other investors and figures that were backing his company at that moment” says Raymon.

Programmed To Being Scammed?
Why do people keep getting scammed again and again despite the red flags? Some may be inclined to say that if you haven’t learnt your lesson from the first time, you probably deserve it. The reality is much more complicated as there are a number of other reasons that could motivate a person to step right back into the scammers trap.

One such reason would be to recover the monies which had been lost in the earlier investment. Such desperation could be caused by the fact that a loan was taken to invest the earlier sum. In the case of a retired senior, the money could have been taken out of a retirement fund or their EPF, leaving them to believe there is no choice but to reinvest the balance.

“There are groups of individuals who believe that ‘the night is dark right before the dawn’, hoping that things can only get better. Peer pressure plays a huge role as many succumb to the words of their community members, siblings or acquaintances.”

However, seniors should especially be aware of the factors that make them viable targets as they are generally viewed by fraudsters as more vulnerable and profiled as:

• Having accumulated a measure of wealth,
• Are often lonely,
• Have a reliance on family and friends,
• Having deteriorated cognitive ability to make financial decisions.

While the profile may not be applicable to all seniors in some form or another, it is important that seniors take steps to ensure they protect themselves should they find certain profile aspects true.

The Aftermath Devastation
While being positive about an investment is good, it must be checked with obtaining the right information and a realistic outlook from research prior to making an investment. Otherwise, the consequences are dire as the impact affects more than just your finances. It can devastate your mental, emotional and physical well-being.

The scope of the devastation varies depending on where the investment originated. The damage would be even greater if the sum invested had come from someone in need or a loan which could not be serviced. Furthermore, there is a profound sense of hopelessness and violation after being cheated by someone who is trusted.

“This hopelessness is further aggravated if one loses their home or loved one due to the investment. Following that, this will usually lead to self-damaging habits or suicidal thoughts” says Raymon.

Recovery & Closure
Those affected by fraud are often ashamed of the fact that they are unwilling to share their story with others, leading to many cases of fraud going unreported. The reasons for shame varies depending on the social status and position in a community which one holds.

“A person would be more embarrassed to make such disclosure if they are a public figure or social representative which the community looks up to. That said, no one would want to be associated with the words such as cheated, defrauded or corrupted”

However, the community alongside friends and family, should not leave the victims to stay stagnant in their mistakes and encourage them along the road to recovery, whilst urging them to report the scam. The reason is more than simply recovering lost monies, it is also a matter of health.

By not reporting the scam, the event is then internalised and the negative effect of shame heightens, which can then trigger depression and even suicide. It is important for the fraud victim to keep moving forward. While this is difficult, staying stuck in victimhood further destroys self-esteem and the ability to recover.

While recovery of the financial loss is not guaranteed, reporting the scam and shedding light on it to create awareness on the dangers of fraud will help to restore some feeling of control and self-esteem.

When perpetrators of fraud are caught, knowing that their report has enabled justice to be served would help to bring closure and a sense vindication. Being a victim of fraud, one can play a role in creating awareness on such issues as well as being informed, taking heed to what is happening in the news and media by taking precautions prior to embarking into further investments.



Aged Care Group (ACG) is an organisation engaged in the business of elevating and providing aged care services in Malaysia. ACG is driven with a strong vision to advocate innovation and transformation in ageing by offering continuum care as a premium choice for enriched living. We operate in an ecosystem that provides integrated care services and products through meaningful partnerships with individuals, government, organisations and corporations. ACG seeks to be the forerunner in all things related to aged care, building on the years of knowledge and experience of its shared holders and management team. A detailed profile of who we are can be obtained at www.agedcare.com.my.


Source: Smart Investor, June 2017

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