Funding Societies Malaysia

Author: FSMY   |   Latest post: Mon, 19 Jun 2017, 11:02 PM


How to identify money game?

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Money game operators are having a big moment in the local media these days, though most of us would rather they disappear. Notable schemes such as MBI Group and JJ Poor to Rich (JJPTR) dominated the recent news. The Ministry of Domestic Trade, Co-operatives, and Consumerism recently froze RM 177 million (around USD 41.5 million) from accounts linked to the MBI Group.

But JJPTR is truly something else. Details of the case are staggering. It’s estimated that 400,000 people fell victim to JJPTR’s money game scheme, involving 300,000 locals and 100,000 foreigners. In total, investors may lose RM 500 million. Consider that according to this article, the amount of losses caused by get-rich-quick schemes and love scams in Malaysia is believed to exceed RM 1 billion annually. That makes the losses from JJPTR half the annual money lost due to fraud.

So what are money games and how do we avoid them? How can we tell legitimate investment platforms from frauds?

Money games are really just another term for scams and Ponzi schemes. People are lured into these schemes because of the get-rich-quick promises.

Worse, there’s actually a strong demand for such services. This article states that there are more than 40 money game operators in Malaysia, a third of them based in Penang. What’s more is a source in the same article claims that 6 out of 10 adult Chinese in Penang have invested in money games. The demand stems from an appetite for higher investment returns; people are willing to take the risks involved.

To reduce the risk of loss, members of the public are advised to regularly visit the Bank Negara Malaysia (BNM) website for a list of companies and websites which are neither authorized nor approved under the relevant laws and regulation administered by BNM.

Not all new investment platforms are scams. Especially as we are living in the golden age of financial technology (FinTech). FinTech grew and developed as a response to the financial problems we face, from making financial information more easily accessible to addressing the lower return rates of traditional investments. Some new investment alternatives created by the FinTech industry include virtual currencies and peer-to-peer (P2P) financing.

P2P financing platform essentially connects creditworthy businesses and SMEs with investors through an online marketplace. By investing into businesses and SMEs, investors will earn higher returns while businesses get working capital to grow and develop their enterprises.

There are exciting, profitable – and perfectly legitimate – investment opportunities out there. And if you know what criteria to look for, it isn’t difficult to identify money game operators from P2P financing platforms:

P2P Financing


Money Game

Returns should be higher than fixed deposits or investment grade bonds. To account for the risk in SME financing, investors should expect either high single-digit or double-digit annualized returns to account for the risk of default.

Expected returns

Returns are unusually high, such as 20% per month. Companies with dubious returns are usually Ponzi schemes.



Does not try to recruit investors as on-the-ground company agents.



Multi-level marketing

Money games try to make you their spokesperson to lure in more investors. They are willing to pay a high commission rate to make you their agent and mouthpiece.

Products and services are clearly defined, such as business term financing and invoice financing to help meet SME short-term cash flow needs and expansion plans.

Products & Services


Details on their products and services are vague and usually involve gold and forex.



Credible platforms will provide information such as SME financial statements, company background and industry,  repayment history, etc to help investors make decisions. A good P2P platform will also educate investors on how to diversify and manage their P2P investments.


Lack of transparency and information – investors often have no idea what they are investing into.

P2P financing is regulated by the Securities Commission and operators are required to adhere to strict compliance and regulatory requirements, including due diligence, credit assessment, reporting, and funds handling.




The company is not regulated by the government and relevant authorities. In addition, the company usually lacks the license needed to operate and provide financial services.


Investor funds are held and managed by an independent third-party, usually a licensed trustee. The P2P financing operators have no direct access to investor funds. Investors are able to withdraw their funds anytime unless already pledged a particular SME or an investment opportunity.


Investor funds are directly held by money game operators. Investors are either unable to freely withdraw their funds or are subjected to highly unfavorable withdrawal conditions.


Some final words. Here’s the quick key takeaways:

·       There is a big appetite in Malaysia for higher returns. But such hunger comes at a cost. There are many con artists and scams out there.

·       FinTech solutions such as P2P financing are here to stay. As an investment alternative, P2P financing offers high returns, is affordable, and its concept is easy to understand.

·       As with any investment, pick with caution. Choose a P2P financing platform recognized by the Securities Commission (SC) and has a good track record. For a list of P2P financing operators approved by the SC to operate in Malaysia, click here.

Website: http://blog.fundingsocieties.com.my/2017/06/14/how-to-identify-money-games-from-credible-investment-platforms/

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