Other form of scam (Part 2)

Just recently the Securities and Exchange Commission (SEC) issued an investor alert after it received reports that some people or entities have been offering investments to the public, particularly targeting our hardworking domestic helpers, with a promise of hefty returns. The SEC said that the “public should not invest their money in such fraudulent or suspicious transactions because the promise of earning a very high income which is too good to be true is false or an investment scam”.  According to SEC commission secretary Gerard Lukban, the public is “warned to be extra cautious in parting with their hard-earned money in what appears to high-yield risk investments which may turn out to be a fraudulent scheme”’

Furthermore, according to DTI, you may encounter persons or companies that represent themselves as being authorized by the SEC to accept investments, provide investment advice, or manage other people's money.  In an effort to convince you that they are legitimate securities market professionals or that what they do is legal, they present to you their SEC Certificate of Incorporation.  But the registration of a company with the SEC does not necessarily mean that it is authorized to provide financial services.  Such activities generally require another secondary license from the SEC or the BSP.  Companies that require a secondary license include:  brokers in securities (companies that buy and sell securities for the account of others); government securities eligible dealers (companies that are authorized to deal in government securities such as T-Bills and T-Notes); investment companies or mutual funds (companies that pool funds from the public and invest the money in various securities); investment advisers (companies that give investment advice or manage other people's money for a free); and pre-need plan companies (companies that issue pre-need plans). Bottom line, always check with the SEC first if you want to make sure that a company is really authorized to undertake what it represents it can do.

Below are other forms of scam as per DTI’s “Don’t Be A Victim of a Scam”.

Home investment or employment opportunities. You might receive a letter or e-mail, or see advertisement saying:  "Imagine owning your own business, being your own boss, working only a few hours a week, never having to commute to your place of work… Sounds like a dream to be able to stay home and make lots of money. But these offers are often fronts for phony get-rich-quick schemes.  If you reply, they'll  ask you to give money for a "plan" or to buy materials to produce goods, which they promise to buy. Once you've parted with your money, they'll find all the excuses not to purchase what you've made.  Not only do you have worthless goods, you've lost your money!

Offshore investments. If you receive a letter/ email from a top officer of an Offshore company, marked “strictly confidential", offering an opportunity to share in a multi-million dollar bonanza, hold on to your savings!  You might become the next victim of offshore investment scam, which has victimized innocent people all over the world. The email/ letter will explain complicated controls on foreign currency transactions and offer you a chance to be an overseas partner, with the promise of a fat return for you.  If you respond, they'll ask you for money to bribe authorities, hoping that you'll be willing to spend some of your hard-earned money for the bribe, for a chance to make the fat profit.  If you send money, you will never hear from them again.

Editor’s Note: For comments, rejoinders and questions related to credit & collection, Mr. Ed F. Limtingco can be reached at [email protected]