How to Avoid Investment Scams in Thailand

Nothing brings out more animosity among expats in Thailand than investing and financial advisors. Independent financial advisors in Thailand have the shameful reputation of being some of the most immoral in the world, and that reputation is often well-deserved. Many expats and Thai people have lost their life savings in what seems to be a never-ending supply of scams and get-rich-quick schemes.

Let’s look at why people fall for investment scams and then figure out how to avoid them by analyzing some of the largest and most recent ones.

Why Do People Fall for Investment Scams?

There’s a saying some expats leave their brains at the airport when they come to Thailand because they engage in behaviors they would never back home. A common example is riding a motorcycle without a helmet, license, or insurance. Others buy property illegally. Many buy a bar or restaurant and expect it to do well even though they have no experience running a business in any country, especially one where they don’t understand the culture. Even more common is giving all your money to your Thai girlfriend or wife. Agreeing to various contracts without fully understanding the conditions is common.

As heart-breaking as those examples are to read about, no one is shocked anymore. They’re so widespread that there is now a culture of victim blaming on internet forums, which isn’t surprising given many of the stories are a result of a series of foolish decisions.

While it seems many expats are their own worst enemy as soon as they enter the country, many investment scams are well-thought-out and sophisticated, so it’s easier to be sympathetic when people lose money. Most people trust financial advisors with their money like they trust doctors with their health. Investing isn’t usually taught in high schools or universities so people rely on professionals to make decisions for them. Money is a private issue that’s not talked about among friends and family. Understandably, most people are unaware of basic investing concepts.

Scammers come across as very professional and convincing with well-polished sales pitches. They even use the intricacies of Thai culture to take advantage of both expats and Thai’s. For example, if you are relying on your Thai partner to translate but you have a lot of pressing questions, your partner may end the conversation as quickly as possible to avoid offending the scammer, which leaves you with incomplete information to make a decision.

It’s no secret many Thai people have trouble saying no and avoid uncomfortable interactions at all costs. Not losing face and always showing respect to someone who is older or higher up on the social ladder can be more important than fully understanding an issue or losing money, and scammers know this. Many Thai people are also susceptible to the herding effect, and will blindly follow the leader to the latest fad or scam.

Before going any further, I have a lot of sympathy for anyone who has been a victim of an investment scam and in particular any of the scams I am going to talk about. I realize it could have dramatically changed your life and it may be impossible to recover from. Hindsight is always 20/20, and I’m not writing this as an ‘I-told-you-so’ piece, but rather to learn from what happened so others are not victims in the future.

Common Investment Scam Tactics

  • High return
  • Low risk
  • Investments in currencies, gold or other metals, commodities, property, new technologies, loans/mortgages, sales of products
  • Advertising or cold-calling
  • Difficult to understand
  • Must invest quickly
  • Everyone is doing it
  • Paid memberships
  • Celebrity endorsements

All investment scams are designed to take advantage of the innate human desire for high returns at low risk. But what exactly is a high return? Historically, the US stock market has returned about 10% per year on average before inflation. To put that into perspective, a 10% return per year compounded annually for 7 years will almost double your money. Keep that money invested for 40 years and the total return is over 4,500%!


As you can see from the above table, you don’t need an extremely high return to get rich. All you need is to understand compound interest and keep your money invested long-term. That’s it.

Warren Buffet said, “My wealth has come from a combination of living in America, some lucky genes, and compound interest.”  The numbers in that table are not adjusted for inflation, so your real return after 40 years would be much lower (about $140,000 using 3% inflation per year), but the basic principles are the same. Invest regularly for the long-term to take advantage of compounding. You can also see why it’s important to invest your money to protect against inflation. Decades of even low inflation will dramatically reduce your buying power.

Low-cost index funds are a good way to capture the average US market return. Tax-deductible LTF/RMF funds can be used to invest in Thailand and actively managed investment trusts can be added to an international portfolio.

Investments advertise returns before inflation, so I am going to use an average stock market return of 10% per year for the rest of this article to make comparisons easier.

Understanding Risk

It’s important to understand there is no free lunch when it comes to investing – the higher the return, the higher your chances are of losing money. In the investment world, the risk-free rate of return is the US government 10-year bond, which is currently yielding about 3%. This means you could invest your money at 3% per year with the US government with zero risk (in theory anyway). If you want a higher return than 3%, you have to take on some risk.

We now know the stock market returns an average of 10% per year, but it doesn’t go up in a straight line. What is the risk of investing in stocks?

To avoid using statistics, a simple way of looking at risk is how much you can lose in any year. The financial crisis of 2008-2009 saw global markets collapse and lose 50-60% of their value. The first 10 years of the 21st century are often called the ‘lost decade’ since US markets returned almost nothing. In 1929, stocks lost almost 90% and took 16 years to recover if dividends were re-invested.

Therefore, investing in the US stock market for a 10% average return per year comes with the risk of losing between half and almost all of your investment in a single year. Any investment that returns higher than 10% comes with the risk of losing all of your money.

We can conclude for any investment in today’s market, you can get 3% per year risk-free, and once the average return rises to 10% per year, you may lose at least half of what you invested. Any return higher than 10% per year should set off alarm bells since you may lose all of your investment at any time.

The difference between a 3% and a 10% return may not seem large, but just fractions of a percent have a huge effect when compounded for decades. Anything even a bit higher than 10% per year comes with an increased risk of losing everything.

I will talk about the other common investment scam tactics a bit later when we look at specific scams in detail. Next, let’s talk about how to protect yourself.

How to Protect Yourself

The easiest and best way not to lose a lot of money investing is to only put a small percentage of your total net worth in any single investment. By spreading your hard-earned money among multiple investments, you can limit your loss if anything happens to a specific company, fund manager, or even country (look at Venezuela).

By diversifying with different asset classes, such as stocks, real estate, and bonds, in developed, emerging, and international markets and re-balancing regularly, it is possible to increase your rate of return per amount of risk. I won’t go into detail here about the efficient frontier, but if you are interested in learning the technical details behind the benefits of diversification, I recommend reading ‘All About Asset Allocation’ by Richard Ferri.

As a rule, I never invest in individual stocks since any company can fail at any time for any reason. I only invest in mutual funds, index funds, and investment trusts, (and a bit of crypto on the side) with no more than 5% of my total assets in any fund. Each fund holds dozens or hundreds of stocks, and while there is some overlap between funds, my exposure to any single company is very small. I have even diversified my investments in Thailand by using more than one asset management company, just in case.

Diversifying is often called the only free lunch with investing, but in reality, the more you diversify the higher your transaction costs and the more time you will spend re-balancing your portfolio. Even though diversifying isn’t perfect, there is no better way to protect yourself against scams or the unexpected.

Let’s take a look at the largest and most recent scams that have affected investors in Thailand to see what we can learn from them.


Thailand Investment Scams

  • LM Investment Management Scam
  • Thai Property Scams
  • UFUN Scam
  • Chulalongkorn University Savings Cooperative Scam
  • Klongchan Credit Union Cooperative Scam
  • WealthEver Company Scam
  • Other scams

LM Investment Management Scam


Perhaps the most notorious investment scam to ever reach the shores of Thailand is the LM Investment Management (LMIM) scam from Australia. This scam was very sophisticated and difficult to detect, which resulted in thousands of expats losing their life savings.

Independent financial advisors in Asia were paid large commissions to promote funds from LMIM to expats. At first glance, they seemed like solid investments from a first world country. One fund was marketed as a large property fund that was as safe as money in the bank. With a long history of funds that owned resorts and golf courses in a country with a safe and heavily regulated financial services industry, many advisors and expats felt LMIM was worth investing a lot of money in. Returns were a modest 8-9% which didn’t raise any suspicions. At that time, property was thought to be a dependable investment with little risk. Even credit agencies were giving derivatives of sub-prime mortgages investment grade ratings before 2008.

After taking money for over 14 years from over 12,000 investors around the world, it turned out many of the properties never existed. Investors lost up to 3 billion AUD. Instead of investing in quality brick-and-mortar real estate, the funds consisted of highly leveraged loans to property developers or grossly overvalued assets that all collapsed with the property bubble in 2009.

Disgracefully, the funds continued to take in new money until 2013, up to 4 years after cracks first appeared when investors were unable to make withdrawals. Between 2009 and 2013, when it was already clear LMIM’s largest fund was in distress, its gearing was increased to an astonishing 85% (most funds I have seen use under 10% gearing), it gave tens of millions of dollars of loans to its directors, increased management fees, and increased commissions to financial advisors to 9%!

Advisors who promoted LMIM funds when they knew withdrawals were frozen while they pocketed 9% commissions can in no way claim ignorance. Most of those advisors in Thailand were operating illegally and are the main reason for all the animosity among expats towards anyone who sells investments.

Sadly, many expats will never recover from their losses. The Australian Securities and Investment Commission has been ineffective at bringing the scammers to justice or recovering any money.

When trying to learn from this experience, it’s hard to spot any red flags that would have alerted an informed investor. Returns were in-line with expected values, property was viewed as rock-solid at the time, and Australia is a first world country. The only thing that would have stood out is the number of financial advisors promoting LMIM to their clients at the same time. If you didn’t know that was going on and weren’t aware of the large commissions they were getting, there’s not much else you could have done except to follow the diversification rule of only investing a small amount of your total net worth in any single fund.

Thai Property Scams

condo-investmentProperty scams in Thailand are too numerous to list, but you only need to look at few to see a common pattern. Most property scams in Thailand are a result of foreigners buying land illegally. Foreigners are not allowed to own land in Thailand – period. Foreigners are allowed to buy a condo in their own name as long as foreign ownership in the building is under 50%. Internet forums are full of advice on how to buy land using a company or how to construct a 30-year lease or ufstruct for the buildings on top of a piece of land, but none of those schemes are solid enough for me to put my hard-earned money into. Let’s take a look at a few examples to see what can happen.

Two expats lost over 1 million USD each buying property on the island of Phuket. Properties were transferred from their companies by a combination of unscrupulous lawyers, wives, money lenders, and police officers. It’s clear the rule of law around property ownership for foreigners is not strong. The stories of Colin Vard and Ian Rance are heartbreaking and their court cases will drag out for years.

The story of a Briton who died after being scammed into thinking he bought an elephant breeding business in Chiang Mai is quite distressing. The 38-year-old man lost over 300,000 USD when his girlfriend from the bar convinced him it was a good investment. Rumors online are that he worked at the local elephant sanctuary while believing he owned it. When he finally realized he had been scammed and his girlfriend had run away with the money, he checked into a cheap guesthouse and drank himself to death.

A group of four foreigners was scammed out of almost 1.4 million USD buying what they thought were quiet retirement properties in the hills of Chiang Mai. Lured by advertisements that showed a luxurious retirement development in the forest, they lost everything when authorities determined the development encroached on protected land that cannot be sold.

Another common property scam revolves not around owning property but renting it. Foreigners often rent land for business use, which is perfectly legal. As soon as the business becomes successful though, their Thai landlord increases their rent to an unsustainable level. There are even rumors of Thai owners paying accountants of foreign businesses to find out how much they are making so they can increase their rent right to the limit.

Many foreigners buy houses in their wife’s name. If you do this it’s important to minimize your risk by getting a mortgage or only spending what you can comfortably walk away from. Your wife will have to sign documents at the Land Title Office stating she’s buying it with only her money. As a result, it’s likely you will lose everything you spent on the house if you get divorced.

To avoid losing money on land in Thailand, it’s best to completely avoid buying it. If you like to live dangerously, rent or only spend what you can walk away from without any second thoughts. You have been warned.



In just a few years, the UFUN Group conned over 120,000 people in Asia out of more than 620 million USD. The sad thing is, this scam was easy to see from miles away since it used all the common scam tactics listed above.

In addition to being an obvious scam by itself, UFUN was modeled after a similar scam called Zeek Rewards that proliferated throughout North America. At its peak in 2012, Zeek Rewards boasted more than one million members and was listed in the top 100 websites in the world. There were different levels of membership, and the more you spent the more you could make. The main part of the scam was a penny auction website where you could buy and sell products for rewards.

Zeek Rewards street parties were common in some cities and people boasted about making ten of thousands of dollars per month. Euphoria was in the air. I asked a friend how it worked since you didn’t actually own or ship the products you put up for sale in the online auctions, and he had no idea. The whole thing was a complicated mess.

On August 17, 2012, the US Securities and Exchange Commission shut down Zeek Rewards claiming it was a Ponzi scheme. Some people were lucky and recovered up to 80% of the money they lost. Others lost everything.

As soon as Zeek Rewards ended, an Asian version called the UFUN Group popped up. The UFUN Group took everything that made Zeek Rewards successful to another level. Each element was tailored precisely to appeal to Asian culture. A crypto-currency similar to bitcoin, called Utoken could be used to purchase items in the UFUN store. Celebrities, including a Thai general and others at the very top of society, quickly signed on to give their endorsements. UFUN owned buildings and resorts. They even had a plan to list on the Nasdaq stock exchange in the US. And like Zeek Rewards, you had to buy a membership and get new members underneath you, and the more you spent the more you could make. Graphs on their website showed the real-time price of Utoken, and you had to buy in quickly because it was only going up and would reach the moon when it was listed on the Nasdaq.

Cracks started to appear when some members were unable to get their money out. At the same time, huge marketing events and parties were held in Bangkok where celebrities strutted on stage and gave speeches. UFUN even donated money to charities to gain credibility.

In 2015, the UFUN offices in Bangkok were raided and the executives arrested. 22 people were convicted and sentenced to a total of 12,267 years. Unfortunately, the most time they can serve under Thai law is between 20 and 50 years.

Although the UFUN scam was easy to avoid since it was similar to Zeek Rewards and combined all the tactics common to such scams, over 100,000 people still lost money. Let’s hope similar scams are avoided in the future.

Chulalongkorn University Savings Cooperative Scam

If there’s anyone in Thailand you think would be immune to investment scams, it would be professors at the top university in the country. 78 people lost almost 17 million USD, or about 215,000 USD per person in the largest financial scam to ever hit Chulalongkorn University.

An associate professor conned employees into investing in his fake government lottery cooperative which promised a 1% monthly return. 1% per month works out to be almost 12.7% per year, and at that rate of return, your money would double in under 6 years. Using our previous example of investing 10,000 USD, you would end up with almost 1.6 million USD after 40 years. While not an extremely high rate of return, it’s still high enough to make you cautious since it is much riskier than investing in the stock market.

The scam seemed legitimate at first since monthly interest payments were made on time which convinced members to invest even more money. This is often how Ponzi schemes gain the trust of their original investors. By making the initial payments on time they can open the floodgates to more money later.

The professor behind the scam turned himself into police in May 2017. He laundered some money through female friends and rumors are he lost the majority of it at the casino in Singapore.

The main lesson to learn here is the guaranteed 12.7% rate of return should have raised a red flag. If you are aware of the risks associated with high returns and still decide to take your chances, only use a small amount of your total wealth.

Klongchan Credit Union Cooperative Scam


While not exactly an investment scam, what happened with the Klongchan Credit Union Cooperative is a good lesson in diversification and why you shouldn’t keep a lot of cash sitting in an account.

This scandal is ongoing and affects 53,000 cooperative members. Over 465 million USD was siphoned off by a cooperative chairman and donated to a temple in the province of Pathum Thani, called Wat Phra Dhammakaya. The money was allegedly used to buy property and renovate the temple. The authorities are still searching for the abbot of the temple and even surrounded the temple grounds for nearly a month with hundreds of police in an attempt to arrest him. There is a plan to repay the members of the credit union, but they will have to wait up to 26 years to get all their money back.

I’ve never been a fan of leaving a lot of money in bank accounts, especially accounts that are not insured. Aside from having a small emergency fund, the opportunity cost of not investing your money is too large. The saying, “Time in the market beats timing the market” is the mantra of investors. Inflation is starting to rise again, so keeping money in a bank account earning almost no interest will lose buying power every year. If you would like more in-depth information about why it’s not a good idea to keep a large amount of money in the bank, you can read this article and this article from Early Retirement Now.

WealthEver Company Scam


If people didn’t lose real money, the scam pulled off in April 2017 by the WealthEver company would almost be comical. In the poster above showing Thai celebrities, a 6-day all-inclusive trip to Japan is advertised for about 400 USD. According to the fine print, you had to become a member of the WealthEver food supplement company for a small fee, and the more products you sold the cheaper you could get the trip to Japan.

On the day the flight was supposed to leave, over 1,100 eager Thai tourists showed up at Suvarnabhumi Airport with bags packed only to find out there never was a flight booked for them. The company director, Pasist Arinchalapis, aka Shogun, along with her family, packed their SUV with valuables and tried to flee the country before being caught. A total of 517 victims reported damages of over 1.5 million USD.

This scam proliferated over the LINE chat application that is popular in Thailand and is a good example of herding and the power of social media. There were reports of highly respected people all over Thailand signing up as many of their friends and family as they could. Cathay Pacific got wind of the scam and to their credit, went to the Thai police to report it. The Bangkok Post tried to warn people there were no flights booked for the WealthEver group, although that didn’t discourage people.

Warning signs for this scam include having to buy a membership and sign up new members, large commissions, rewards that were too good to be true, a large advertising campaign, and having to sell products.


There are numerous other Thai scams that could also be analyzed (see references below), but they all follow a similar pattern to the ones we looked at.

The most important thing to remember is any investment that promises a return of more than 10% per year is riskier than putting your money in the stock market. If you never put more than a small amount of your total net worth in any single investment, you will avoid being wiped out by the majority of scams in Thailand. Avoid investments that are mass-marketed or endorsed by celebrities. It’s also a good idea to avoid buying land illegally unless you are prepared to walk away from everything you spend. It’s also prudent to not do anything in Thailand you wouldn’t do in your home country.

If you invest regularly in a diversified portfolio for the long-term to take advantage of compounding returns, you can still be wealthy by the time you retire. There’s no need to chase the high returns that investment scams promise.

The lifestyle that helps people maximize their investments while minimizing their expenses is called FIRE – Financially Independent Retire Early, and how to live that lifestyle in Thailand is the purpose of this website.

I’ll finish this article with two more quotes from Warren Buffet that emphasize the main points of avoiding investment scams in Thailand:

“You only have to do a very few things right in your life so long as you don’t do too many things wrong.”


“It is not necessary to do extraordinary things to get extraordinary results.”


What’s the Average Market Return?

All About Asset Allocation

The LMIM collapse: one year later an investor speaks out

When an investment fund goes bad

The Phuket property nightmare

‘Defrauded’ Briton Found Dead In Chiang Mai Guesthouse

Retirement dreams on Chiang Mai “Hi-So Hill” shattered as foreign pensioners conned into buying forestry land

Landlords in Thailand

What Happened to Zeek Rewards, and Who is Next?

UFUN fraudsters sentenced to thousands of years

UFUN Scam Raided!

Chula savings head turns himself in to face charges

26-year repayment for Klongchan creditors

Thousand Thais scammed with cheap Japan package tour, left stranded at airport

Shogun fraud case wrapped up

Thai couple arrested in Bt1.7-Bn share trade scam, six suspects on the loose

Thai student apologizes for 160 million baht losses after Ponzi scheme got out of hand

‘Duped’ forex investors file police complaints

Invest just 32 days get 40% profit – it sounded too good to be true, and it was

We want our money back – claimants conned on Line owed 30 million in investment scam

Students ripped off in 4 million baht loan fraud – they were promised 100% interest in 15 days!

Students lured into internet scam

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3 years ago

WOW. I had no idea Thailand had so many investing scams. Like you say, be wary of promises of crazy high returns, and always diversify!

Michael @ Financially Alert

Nice article! Very informative and eye-opening. Sadly, scams will be around as long as there are people who are uneducated. The best defensive is to educate yourself and do a lot of due diligence. Thanks for sharing.

3 years ago

Really enjoyed reading this article. Dunno why but I find scams and the people who do them are fascinating. It’s also great to read up on these things to know what to look out for in future! Bottom line for me is always if it sounds too good to be true it most probably is!