Monday, October 14, 2019

SAFE INVESTING: Know the Popular Investment Scams

Investment scams have been a rising issue not only in the Philippines, but all over the world. Despite the numerous warning and public advisories, victims of these scams continue to grow in number as questionable investment institutions make new ways to reach out to unsuspecting customers. To protect investors from placing their financial status at risk, government agencies keep an eye on these institutions.
 
In addition to the government's active role in preventing scams, private entities such as banks must also educate their clients on how to keep hard-earned money in a secured institution, where it is possible to grow. In line with Bank of Commerce's objective to protect its clients, we would like you to know the popular investment scams to avoid possible financial downfall.
 
Affinity Fraud
  • This targets and takes advantage of the leaders of a group to convince members that these investments are legitimate and worthwhile. This type of scam leads to a damaged relationship within the group because all of them may not know that they have entered into an illegitimate investment. The money invested by the new joiners is being used to pay the earlier investors.
 
Advance Fee Fraud
  • Fraudsters ask the investor to pay an advance fee right away in order for the deal to go through and promise to repay it back at a specified time. To reassure the investors, they use official-sounding websites and e-mail addresses, and ask lawyers or agents to give ease to investors that the investments are safe, secure and legitimate. Fraudsters of this type of scam target investors who have already lost their money in other types of investments.
 
High-yield investment programs or "HYIPs"
  • This kind of scam is usually run by unlicensed individuals and promises returns of 30 percent or more, with little or no risk at all, and to be released on a daily, weekly, monthly or annual basis to make it more attractive to investor.
 
Internet and Social Media Fraud
  • Due to the internet's and social media's power to connect with people all over the world without putting in so much effort and money, fraudsters use this to make their investment promotion looks credible making it hard for them to determine what's real and what's not.
  •  
  • This type of fraud also runs by 1) paying to online newsletters to recommend their stocks, 2) hiding the fraudster's identity behind multiple aliases through online bulletin boards and chat rooms to introduce the questionable investment company, and 3) bulk e-mail with personalized messages to be sent to a huge number of people through spam or junk-email.
 
Ponzi Scheme
  • Ponzi Scheme is named after Charles Ponzi, who deceived thousands of investors in New England. Just like other types of investment scam, it promises an enticingly high return with little or no risk at all. Fraudsters collect money from new investors and use this to give returns to the existing investors or some of it will be placed on their own pocket. To be able to maintain their questionable operation, they have to continue recruiting new investors to keep the money revolving.
 
Pyramid Schemes
  • Its goal is just to recruit new investors through social media, internet advertising, company websites, YouTube videos, and other sources. Pyramid Schemes promise a high return in a short period of time without a need to sell a product or service but usually have a complex commission structure. They also use legitimate multi-level marketing programs to make their organization look like a legitimate business which gives good impression to potential investors.
 
For a list of companies duly registered to offer investments to the public, visit the Securities and Exchange Commission (SEC) website at www.sec.gov.ph. Be informed and aware about safe investing.

Monday, October 7, 2019

Be Debt Free

Have you ever said, "Kasusweldo pa lang, ubos na!” Or worst, "Wala pang sweldo, ubos na!”
If you have, you are not alone. Millions of Filipinos cry this out every payday.
Once, a man invited me for coffee and asked for advice. At one point in our conversation, he ranted about his financial state. His major complaint was about how low his salary is.
He said in jest, "Ang sweldo ko parang sibuyas. Pag hinahati ko na sa gastusin, naiiyak na ako.”
I advised him to lower his expenses. He answered, "Paano magbabawas ng gastos, eh, sagad na talaga? Kulang talaga eh.” (How can I reduce my expenses? We are spending the barest minimum already… but what I get is just not enough.”)
To answer, I brought out a pen and gave him a clean table napkin and said, "I will ask you questions and if you answer yes to any one of them, just write 'Yes' on the tissue paper.”
He obliged. And so I started asking him the following:
Do you drink soft drinks?
Do you smoke?
Do you eat merienda?
Are your kids studying in an expensive school?
Do you buy branded clothes?
Do you have more than one cell phone?
To my thinking, if he answers even one 'Yes' to any of these questions, I would tell him that he had not exhausted all means to lower his spending.  He had not yet reached absolute bottom. If, however, he never wrote 'Yes' to any of my questions. I have a 'sure yes' question: "Did you pay for my coffee?” He will definitely answer, 'Yes.'
If you are like my friend who can answer 'Yes' to any of my questions then — hindi ka pa sagad!
You just need to manage your finances better.
May your dreams come true,
Bo Sanchez
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