4 tips from PNoy on avoiding pyramid scams

In the wake of the several pyramid scams that have victimized thousands of Filipinos, President Aquino offers advice to investors on how to avoid similar scams in the future

ADVICE FROM THE PRESIDENT. President Benigno Aquino III talked about the Aman scam in the sidelines of the ASEAN-China Summit in Phnom Penh, Cambodia. Photo by Malacanang Photo Bureau.

MANILA, Philippines – In the wake of the Aman Futures Group pyramid scam that has duped about 15,000 in Pagadian and other cities in Mindanao, President Benigno Aquino III on Tuesday, November 20, offered tips to the public on how to avoid becoming victimized by money scams.

Aquino told reporters on the sidelines of the 15th ASEAN-China Summit in Phnom Penh, Cambodia, that as early as July, the Securities and Exchange Commission (SEC) had issued a warning on its website against Aman, but that it wasn’t until its offices closed in late September that investors panicked.

Aman is only one of 3 reported scams at the moment. Coco Rasuman and Visionary 20/20 have also allegedly scammed investors in Lanao del Sur and other provinces. 

Below are some of President Aquino’s advice to investors on how to detect money scams:

1) You can’t explain how the interest is earned

Aquino said he understands why people are enticed to invest especially when the promised returns are high. Aman allegedly lured investors with promises of up to 40% returns in just 20 or 30 days.

The President said that if you cannot explain how a company is able to afford such high interest rate, it is best to step back. “Para mabayaran ka ng ganito kalaking interes, paano niya babayaran ito? At ‘pag hindi mo masagot nang maayos ‘yon, malabo siguro itong pinapasukan mo,” he said.

(For the company to be able to pay you such high interest, how can the company afford that? And if you can understand that question clearly, then what you are engaging in is probably unsafe).

The company said profits were produced by a Malaysian brokerage firm Okachi (Malaysia) Sdn. Bhd. — with whom it had a customer agreement — and which engages in trading commodities such as oil, manganese, palm oil and nickel.

2) It seems ‘too good to be true’

Comparing companies that promise investments to legitimate banks is another way to detect a sketchy proposition. Aquino pointed out that when you deposit money in a bank, savings interests are only about one per cent per annum or less.

Companies that offer exponentially higher rates are suspicious, he said.

He offered advice he received from his parents as a child. “So ‘nung bata ako sinabi sa akin ng mga magulang ko, ‘If it sounds too good to be true, it probably is not true’,” he said. “Sana makatulong na talagang (kapag) ang ganda-ganda (ng) inaalok, malamang hindi totoo.”

He said he hopes Filpinos would take this to heart to avoid temptation.

3) Heed government warnings

Aquino explained that it took over two months before investors approached authorities with their complaints, despite government warnings against investing with Aman.

He said that aside from the SEC, the National Bureau of Investigation had also started a probe in July but investors did not want to cooperate with the police. Instead they were angered that the company was being investigated at all, calling them “killjoys” and fearing that the probe would affect the likelihood of them receiving their interest.

Aquino said it was hard for the government agencies to file a case against Aman because no one was willing to testify against it. More victims could have been spared had they heeded initial government warnings, he said, but promised they would not tire of issuing the same warnings in the future.

4) Don’t trust initial returns

When the first investors started getting their promised interests, news spread of Aman, which encouraged more and more people to invest in it.

But Aquino warned that just because they delivered on their promises in the beginning didn’t mean they were legitimate.

Merong mauuna, babayaran siya: ‘Ay, totoo pala ito!’ Ganyan, pinagkatiwalaan mo. Pinag-aralan syempre lahat ‘yon,” he said, reminding investors that initial returns are all part of the scheme to attract others.

Victims initially received cash by showing their official receipts, but investors were later issued post-dated checks with a 5-day maturity date instead of cash. – Rappler.com

 

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