The Securities and Exchange Commission of Pakistan (SECP) has raised concerns over a growing number of fraudulent real estate investment schemes, particularly affecting senior citizens who have fallen victim to these deceptive operations and lost their life savings. According to details shared by SECP, these scams exploit the public’s trust by promising unrealistic returns on investment, often manipulating official credentials such as the Federal Board of Revenue (FBR) national tax numbers and SECP incorporation certificates to appear legitimate.
These fraudsters attract unsuspecting investors by presenting them with enticing offers, claiming to invest their funds in real estate projects. They falsely assure contributors of high, guaranteed monthly returns, while collecting substantial deposits in bank accounts under unregistered or unincorporated entities, using registered companies as a façade to lend an air of credibility.
Operating as classic Ponzi schemes, these fraudulent setups initially pay out early investors using the deposits from newer investors to create an illusion of legitimacy. However, as the scheme collapses, later investors are left with no funds and no legal recourse to recover their losses. The SECP has stressed that registering a company with the SECP does not grant permission to collect public deposits or promise guaranteed returns in any form of investment, including real estate.
The SECP has further clarified that it does not regulate most real estate investment schemes, with the exception of Real Estate Investment Trusts (REITs), urging the public to remain vigilant and avoid investing in any schemes promising high returns without proper due diligence. The commission continues to remind citizens that such fraudulent schemes are illegal, and investors should be cautious of offers that seem too good to be true.
The SECP also strongly encourages individuals to report any suspicious activities related to real estate investment schemes to law enforcement agencies immediately to prevent further financial losses and hold the perpetrators accountable.
