THERE is never a sure thing when it comes to making money. Risk, which ranges from low to high depending on the venture a person gets involved in, is ever present.

When it comes to investing money, the surest investment in Malaysia is your Employees Provident Fund (EPF) account. The EPF is mandated by law to pay a minimum return of 2% per year and deposits are fully guaranteed by the government. The only way anyone will lose money is if the government goes bankrupt, and that is not going to happen as it stands.

Even unit trust companies and share investing is dependent on the stock market and the quality of the listed company a fund or people buy. Mutual funds and share investing do post losses when the markets turn sour, but blue chips have always delivered over time and having a diversified portfolio of the best companies in Malaysia is one way of seeing your money, with calculated risk, grow over time.

A stable return is also ensured if a person puts his money in fixed deposits, as banks in Malaysia are not going to fail given the current economy.

And this begs the question why are Malaysians investing so much of their hard-earned money in Ponzi schemes that up to now are seemingly free to go about their business in the country?

Bank Negara on its website has a list, which it says is of companies and websites that are neither authorised nor approved by the relevant laws and regulations administered by the central bank.

The number of companies and websites it has now warned of totals 288, according to an update on Feb 24. Furthermore, Bank Negara says people who choose to invest in such schemes or illegal financial service providers have no consumer protection under the laws administered by Bank Negara. In plain English, it means that if you were to lose your money, then it’s just too bad.

It also goes to say that people who participate in illegal financial activities could be charged under the law as abetting the operators of such illegal activities.

A perusal of the list of companies Bank Negara has published shows that a large number of companies that are not approved by Bank Negara laws are involved in gold trading, forex trading and what it calls unlicensed activities. One has to think that what unlicensed activities mean is deposit-taking activity, where people invest or deposit their money in firms in the hope of a sizeable future return.

The first thing that should jump at people in assessing a questionable scheme is the returns being promised. Promises and guarantees of supernormal returns, in many cases more than 10% a month, from companies that have a shallow history or suspect background should not be enticement to invest. It should send a warning signal that the scheme cannot be trusted.

The other good news from the fallout from dubious schemes is that the government is now looking at closing loopholes that have allowed dubious financial schemes to flourish all this time.

The Domestic Trade, Cooperatives and Consumerism Ministry, the police, Bank Negara and other relevant departments have been asked to draw up plans to deal with the scourge of such schemes.

The other thing the prevalence of such schemes has shown is that there is a need for financial education at all levels. While the need of having such education stemmed from dealing with the problem of household debt and bankruptcies, people need to be educated on realistic financial goals as well.

While greed certainly is the motivation to invest in dubious financial schemes, the public should know that those who profit do so at the expense of many who have lost money in chasing a quick buck.