Investment Scam Checklist

Gusto mong yumaman? Open Minded ka ba? I WILL MAKE YOU RICH!!

Ever been offered the chance to make easy money? Sometimes, you might even be tempted, because the promised returns are too great. But what if it’s a scam? How do you know?

It’s getting harder and harder to tell if something’s a scam or not, because scammers are getting trickier, bolder, & smarter. And investment scams come and go in different forms as well.

But first, let us first try to understand what an “Investment” is. Many people use the term but don’t necessarily get it. Most summarize it as “Making money work for you” or somewhere along those lines.

The best definition of the term is from Warren Buffet’s Teacher/Mentor, Benjamin Graham. Benjamin Graham, along with David Dodd, attempted a precise definition of investing and speculation in their book Security Analysis (1934). “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return.

The keywords there are “safety of principal” and “satisfactory return”. Anything outside that is gambling, a fraudulent scheme, or SCAM.

Be extra vigilant and ask more questions, here are ways for you to spot or avoid scams in the Philippines!

  • Guaranteed returns with almost no risk
  • Focus more on testimonials from other members or investors
  • Reliance on “secrets”, “special connections”, “more meetings” and “inside information.”
  • Rushing you to INVEST NOW!

Don’t be afraid to ask questions, and don’t be afraid to say no. Your money and your financial future is at stake. Listen and ask the following questions:
  • What is the name of company/business & location?
  • Are you registered through the SEC or DTI? Ask for documentation and/or receipts.
  • Is the company selling products/service?
  • What is the number of investors, minimum placements, and rate of return?
  • How does the company using the money to generate income for its investors? (There should be a clear-cut process that doesn’t involve any secrets or classified information.)

Don’t let greed and the promise of easy money lure you. Do diligent research.
  • Verify and check their registration via DTI or SEC. Visit their offices if possible.
  • SEC company registration does not grant authority to sell investment instruments (SEC secondary license) such as security, bonds, commercial papers, or similar instruments. 
  • Only investment houses and financing co. with QB (quasi banking) license and with SEC registered securities may offer to sell the same to more than 19 investors.
  • Check the salesperson’s background. Only SEC registered persons (brokers/dealers/salespersons) may offer or sell SEC registered securities to the public.

Remember, investment scams come in many forms, and the people behind them will keep coming up with new ways to steal your money.

If the company gives you satisfactory answers, then proceed but remain vigilant. Remember to only invest money that you can afford to lose. But if they don’t give you good answers, or something smells fishy, then trust your instincts and avoid it at all costs!

Inquire from the SEC corporate governance and finance department 584-6103 or the Markets & Securities Regulation Department 584-5703.

Report to the Enforcement and Investor Protection Department (02) 584-6337.

Seek NBI or police assistance in case of emergency situations.

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Investment Scam Checklist Investment Scam Checklist Reviewed by Vernon Joseph Go on Tuesday, May 07, 2019 Rating: 5

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