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Financial advice for migrant domestic workers from the team at Enrich HK!
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Photo courtesy of Enrich HK
ave you ever been invited by a friend to invest in a company, asked to sell a product, or to work from home and earn a huge commission? If an opportunity promises to help you ‘get rich quick,’ it can certainly be tempting – especially right now when you may well be sending extra money home because of the pandemic. However, there are many scams which specifically target domestic workers in Hong Kong and understanding how to identify them is extremely important.
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Before we get into this topic, you need to know about the AntiDeception Coordination Centre (ADCC), run by the Hong Kong Police. If you suspect something is a scam, call 18222, the ADCC’s 24-hour hotline, even if you’re unsure. Talking to an officer at the ADCC is not the same as making
a formal police complaint. It is simply the opportunity to speak to an officer who can give you advice. It’s also a good way to do your own research about an ‘opportunity’ you’ve been offered before investing your money.
Ponzi schemes Your sister is encouraging you to invest in a great low-risk investment opportunity that promises guaranteed high returns. She says she will receive some payments soon and she has a lot of faith in this company. Should you invest? You’re absolutely right to take a moment to think before investing, because this might well be an illegal investment scheme, known as a ponzi scheme. Organisers of ponzi schemes often trick new investors by promising
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high returns with little or no risk of losing money. Investors may be asked to invite new investors in order to participate, such as family and friends. They contribute money which they believe will be invested in a company, but it is actually used to pay earlier investors as socalled ‘returns.’ We encourage you to take a deeper look at the investment opportunity you’re being told about and see whether you can identify any of these red flags – warning signs that it might be a ponzi scheme. The first red flag is the promise of low risk and high returns. Know that there is no ‘guaranteed’ investment opportunity. Every investment is risky and higher returns usually involve more risk. If an investment pays back regular, positive returns despite overall market conditions, it may be too good to be true. Investment
