Bankers warn against scams

THE promise of huge and quick returns on one’s investments can be tempting. If it’s too good to be true, chances are high that it is an investment scam.

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As the Securities and Exchange Commission (SEC) has identified some companies, mostly in Luzon, that could be involved in illegal investment-taking activities, the Cebu Bankers Club (CBC) has also decided to warn the public to avoid fraudsters who are on the lookout for more victims.


“If it sounds too good to be true, it is. Any investment opportunity that claims you’ll receive substantially more could be highly risky – and that means you might lose money,” CBC said in its recently issued public service advisory.


When one promises a guaranteed return of investment, most likely it is a scam. The CBC explained that each investment carries some degree of risk, which is reflected in the rate of return one can expect to receive.


In the case where the money invested is “perfectly safe,” CBC said this means the person will most likely get a low return. High returns entail high risks, possibly including a total loss on the investments.


Pitches like “everyone is buying it” might be another red flag. A sales presentation that focuses, not on the product, but on how many others are doing is not worth considering.


The third red flag is when scam artists ask for immediate money. Lines like “This is once-in-a-lifetime offer” and “It will be gone tomorrow” are signs for future investors to back off.


CBC warned that fraudsters often try to lure investors through free investment seminars. They think that if they do a small favor for the victim, such as supplying a free lunch, that person will do a big favor for them and invest in their product.




Knowing all these red flags, CBC president Maximo Rey Eleccion advised the public to do proper research when faced with such tempting offers.


“Ask questions. Fraudsters are counting on you not to investigate before you invest. Fend them off by doing your own digging. It’s not enough to ask for more information or for references – fraudsters have no incentive to set you straight,” the CBC reminded.


Looking for the company’s financial statements from the SEC will be helpful to check the legitimacy and stability of the company. In addition, knowing the salesperson, even if you already know the person socially, will go a long way. “Find out if that person is licensed to sell securities and whether they or their firms have had run-ins with regulators or other investors,” the 52-year-old organization said.


Beware also of the “halo” effect, the organization warned. Investors can be blinded by a halo effect when a con artist comes across as likeable or trustworthy. They said that credibility can be faked and that actual qualifications should be considered, rather than one’s personality.


As scam artists continue to look for people they can victimize, Eleccion said everyone can fall victim to this, not just those who have a ready amount of money to invest.


Retirees, overseas Filipino workers and even low-wage earners can be victimized. Some, he said, although aware that what they are dealing with is a scam, will still risk their investments because of sweet promises of earning the quicker and faster way.


“The way I see it, people still go for it and it’s because of greed,” Eleccion said.


The newly-elected president of CBC instead advised those who are considering to grow their money to deal only with legitimate and stable financial institutions.


SEC earlier issued warnings against Emgoldex Philippines, which renamed itself to Global Intergold, and One Dream Global Marketing Inc.


The former is not a registered corporation with SEC while the latter is, but both are not authorized to solicit investments from the public.


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