Why Singapore is Prone to Investment Scams — and What Investors Can Learn?

Singapore is known for its strong financial system and trust in institutions. Ironically, this same environment has made the market especially vulnerable to well-packaged scam investments. Over the past few years, several schemes have promised high returns and stability — only to collapse, leaving investors with losses that could have been avoided.

At Abiel, we believe it is important to understand why these scams work and what investors can learn to protect themselves while still pursuing legitimate opportunities.

1. Limited Range of Traditional Investments

Singapore’s retail investors typically have access only to a narrow range of mainstream investment products:

• Bank deposits, which offer safety but low returns.

• Insurance-linked policies or CPF, which are highly regulated but restrictive, and long-term.

• Residential property, which is now heavily taxed and capped by loan restrictions.

As a result, investors with excess capital often find few options that offer both yield and flexibility. This pent-up demand creates a fertile environment for new and “alternative” investment products to emerge — not all of which are legitimate.

2. The Market Gap that Scammers Exploit

When investors are hungry for better returns, scammers step in to fill the gap with the same three promises that rarely fail to attract attention:

1. Low Entry Price – “Anyone can start with just a few thousand dollars.”

2. High Returns – “Earn 15-30% a year, safely.”

3. Guaranteed Income or Capital Protection – “No risk, fully insured or backed.”

These schemes appear to solve the investor’s pain points — affordability, yield, and safety — all at once. But this is exactly why they spread quickly through word of mouth and social media.

3. The Psychology Behind the Problem

Singapore investors are generally financially literate, but also trust systems and branding. Scammers know this, and they design offerings that look professionally structured — often registered under companies, hosted in co-working offices, or endorsed by influencers.

The result is a false sense of legitimacy. In addition, cultural aversion to risk plays a part. When “guaranteed” or “secured” returns are marketed, it appeals to investors who want growth without volatility — an impossible combination in real finance.

Warning Signs of A Scam Investment

Red Flag	Description	Why Is It A Concern
Unrealistic Returns	Promised returns far above market average (e.g. >15% annually)	No genuine business can sustain this without risk.
Guarantee of Returns	Claims of 'risk-free' or 'capital guaranteed' by unknown entities	In real investment, all returns come with risk.
Far-off or Unclear Asset	Overseas, vague, or unverifiable underlying project	Difficult to verify performance or ownership.
High Commissions	Large referral or agent fees (often >10%)	Incentivises selling over the sustainability of the investment.
No Clear License or Regulation	Not supervised by MAS or a known authority	Lack of oversight makes recourse difficult.
No Claim upon Default	Contracts that limit investor rights or recourse	Investors cannot recover losses.

The Broader Takeaway

Scam investments thrive where legitimate alternative products are limited. This underscores the need for more accessible, regulated avenues that allow investors to participate in real, asset-backed opportunities — such as co-investments in physical property or revenue-generating businesses.

At Abiel, our mission is to close this gap responsibly – offering investors exposure to tangible assets with transparent, clear structures, rather than speculative promises.'

For more investment insights and related articles, head to our website: https://abiel.com.sg/

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Got your eye on a shophouse or commercial asset? Need help decoding the GFA or planning your next investment? Get in touch with us: enquiries@abiel.com.sg