Expert warns public anew on “pyramiding” schemes

CEBU, Philippines – The investing public is warned anew against the investment scams that are still proliferating despite efforts and investment educational campaigns made by financial advocates.

Marvin Fausto, business development consultant of COL Financial Group Inc., reminded the investing market to pay attention on the promises made by [pseudo] investment channels, such as assuring a fixed or guaranteed return.

If return-of-investments is assured in a shorter span of time, as well as attractive "instant" yield is being promised, investors should be wary of his investment.

"Everybody wants to get rich easily and instantly," said Fausto, usually these scams or people behind and promoting it are experts and trained to play with people's emotions--the reason why there are still a lot of Filipinos victimized by scams.

Recently, the Department of Trade and Industry said that “if the investment will earn by recruiting other people and not by selling valuable products, this is a concrete example of a pyramid scam.”

It said these scams commonly lure victims through offers of “easy money,” “double your money” and “quick money”.

DTI explained that pyramiding is generally characterized by people earning primarily from the act of recruiting other people who pay significant registration fees to join the pyramid scheme.

The scheme earns profits primarily from participant’s entry fees and the income is dependent on the participant’s position in the organization than in the ability to sell the products or services.

Aside from pyramiding, there are also other investment scam floating in the market and people should be wise enough to spot them easily, before they ultimately "throw" their money, Fausto said.