Stemming the scam epidemic

THE recent arrest of 52 Singaporeans in Guangxi for suspected involvement in the Nanning pyramid schemes and related offences sent shock waves through Singapore.

Like most scams, it started with a seemingly innocent money-making offer. This one included an invitation to attend presentations in Singapore and in Nanning, the capital of the Guangxi Zhuang Autonomous Region in southern China.

While you had to pay for your own flight to Nanning, the accommodation was complimentary; the host rented apartments to house potential recruits. The itinerary included sightseeing and meals in locations that would showcase Nanning as a growing major economic gateway.

Some of the victims were led to believe that the Chinese government had a vested interest in attracting Singaporeans and other Asians to Nanning to invest and/or retire there, as part of its growth plan.

By the time you realised it is a repackaged version of China’s decades-old “1040 Sunshine Project” – a multi-level marketing (MLM) scam originating in China that promised to pay each member in the pyramid up to RMB10.4 million (US$1.6 million) – you could have transferred your hard-earned savings upfront to your host.

And the only way to get your money back would be to recruit your family, friends and colleagues.

There was actually no real government investment or business venture. The Ponzi scheme funded the returns with the entry fees collected from its newer members.

Of greed and gullibility

What I have learned from years of advocating consumer protection is that greed and fear do not discriminate between the less and well-educated. Evidence shows that Singaporeans remain vulnerable to financial deception.

The Nanning scam was just the latest chapter in a long history of Singaporeans chasing get-rich-quick schemes, including:

• Sunshine Empire (2009): This MLM Ponzi scheme swindled 20,000 Singaporeans, including students and retirees, of nearly S$190 million by selling non-existent merchant lifestyle packages with promises of high monthly payouts.
• The Profitable Plot Scheme (2013): Victims lost millions after being convinced to buy land plots in Britain, believing developers would buy them back at higher markups.
• Envy Global Trading Nickel Scam (2021): Former director Ng Yu Zhi orchestrated a mind-boggling S$1.5 billion scam, convincing savvy investors and prominent figures to fund non-existent nickel trading for attractive returns.

The scam epidemic

Annual data from the Singapore Police Force underscores the staggering scale of the scam epidemic.

In 2023, there were 46,653 cases reported, with losses reaching S$651.8 million.

The next year, the number of cases rose to 51,501, and losses surged 70 per cent to a record S$1.11 billion.

In 2025, law enforcement and banking safeguards helped lower the numbers, but losses remained astronomical, at S$913.1 million from among 37,308 cases.

Many victims are not frail seniors, but digitally savvy youth, young adults and working professionals targeted through social platforms such as Instagram, Telegram and Facebook.

Scam syndicates have creatively evolved to prey on different segments of victims. They include physical MLM pitches to highly targeted, digital operations. Varied tactics are deployed, depending on whether they are hunting for volume or high-value targets.

Here is a breakdown of the top four scam types.

Why Singaporeans fall prey

There are two main reasons why Singaporeans fall prey to scams.

First, a false sense of security: Living in one of the safest cities in the world creates a low suspicion threshold. Many assume that if an entity operates openly or involves friends, it must be legitimate. Scammers exploit this inherent trust.

Second, scammers tend to hide behind complexity. Whether it is algorithmic trading, complex MLM matrix structures, or cross-border government-backed property funds and residency schemes, scammers use technical jargon and a referral system to paralyse critical thinking.

Victims may be too embarrassed to admit they do not understand the business model, choosing instead to trust the “expert” or friend presenting it.

Breaking the cycle

Protection begins with basic scepticism.

• If it sounds too good to be true, it is. Guaranteed returns above market rates do not exist without risk or fraud.
• Ask, check and verify before trusting. Understand how the returns are generated. Never send money to an unverified platform, whether it is an online job commission or a government project.
• Remove the shame. Victims often suffer in silence due to stigma, allowing syndicates to continue unhindered.

Whatever form the scam takes, the psychological trigger remains unchanged: Greed masked as exclusive opportunity. For some, this is amplified by a fear of missing out (Fomo).

Until Singaporeans trade greed and Fomo for active scepticism, the victims will continue to change, even as the playbook stays the same.

The writer is an author, head of financial planning literacy at DBS Bank, and an IBF Fellow for Financial Planning