Scams and Ponzi Schemes (Part 2)

Almost daily we hear and read news reports about Aman Futures Group Phils. Inc. Amazingly, despite the fact that the said company only began in February 2012, it had allegedly already victimized more than 10,000 investors for a total of 12 billion pesos.

Then just recently, I received an email from one of my readers about an investment company posing as a broker firm also having tell-tale signs of engaging in a Ponzi scheme. Then previously, a couple of months ago, I was told by a friend about this internet networking company that offers payouts by “just clicking ads” in their website. The catch is before you could join, you have to buy accounts and invite members or  recruit down lines. Obviously, I can’t pass judgment on this kind of business models, as I am not privy to them but I always tell my client that  if it’s too good to be true, it normally does.

As what I have said last week, as early as 2003, The Freeman and the Securities and Exchange Commission in coordination with the then Cebu Commissioner Merle Cunanan, the Department of Trade and Industry in cooperation with my good friend Nelia Navarro of DTI-Cebu had already warned the public against “Scams, Frauds and Pyramiding Schemes”.

According to the Department of Trade and Industry (DTI) information material,  “Don’t Be A Victim of a Scam”,  some of the trademarks of a scam are:

•The person selling you the scheme hurries you.  If you feel that you are being pressured, you are!

•The person selling you the scheme won't give you anything in writing or any official document.

•The person selling you the scheme promises you big profits with little or no effort on you part.

•The person selling you the scheme tells you to decide based on your “gut” feelings. Normally it’s the feeling of excitement or greed they are after.

•The person selling the scheme is having a hard time explaining how the investment works and how your money actually earns.

Now, if you can see or sense 1 or 2 or a combination of these trademarks to the “business opportunity or investment” being offered, you can reduce your chances of being victimized by keeping these Don’ts in mind.

•DON’T be over-impressed by professional looking and sounding people.  These guys are very friendly and will go out of their way to look legitimate and very polished.

•DON’T provide any financial or other personal information before you establish whether the company is legitimate.

•DON’T give in to high pressure tactics.  Take your time before making any decision.  Ask for an explanation of things that you don't understand.  You might feel intimidated by their financial knowledge, but you have a right to know what you're putting you money into.

•DON’T rely on claims made by a company without checking them out yourself or do due diligence by contacting government regulatory agencies such as DTI and SEC.

For comments, rejoinders and questions  Mr. Limtingco  can be reached at [email protected]