Small investors told how to avoid ‘get-rich-quick’ schemes

Investment-savvy Filipinos manage to steer away from "get-rich-quick" schemes like pyramiding and "ponzi" operations by fully scrutinizing and undertaking some kind of a due diligence study on investment proposals that come their way.

The Performance Foreign Exchange Corporation (PFEC), a company engaged in the business of interbank spot currency trading, declared yesterday that the investing public can easily recognize pseudo-investment schemes by giving portfolios a thorough examination.

"If the return on investment – such as the five percent monthly interest offered by pyramiding firms – appears too good to be true, then warning bells should alarm an investor to crosscheck the offering against verifiable data," the PFEC said in a press statement.

The PFEC is currently undertaking a thorough inquiry into the activities of a dismissed employee after the latter was found to have misrepresented the company and violated many of its rules.

The PFEC said it was unfortunate that some people believed this employee’s unauthorized pitch that might have included the use of company letterheads and other materials. The company clarified that it is engaged in spot currency trading which does not guarantee a fixed rate return on investment.

"As in any business, there can be no guarantee as to whether an investment would tick or not. Any claim to the contrary, such as the ones reportedly used by this employee in his unauthorized activities, should have warned investors to check out the offering," the PFEC said.

The company said it does not guarantee returns on funds which may have been taken through misrepresentations like the promise of a return on investment pegged at a fixed rate of interest per month.

The PFEC, which has undertaken steps to ensure that all its clients would remain unaffected by the unauthorized activity of any person, has vowed to prosecute for the fullest extent allowed by law any misrepresentation and/or activity detrimental to the interest of the company and its clients.

The PFEC warned that unless pseudo-investment operations are stopped from duping thousands of small-scale investors of their hand-earned money, small players may altogether refuse to participate in economic activities that contribute to nation-building.

The company cited the case of Albania, whose government had collapsed after almost half of its population was victimized by pyramiding and "ponzi" schemes.