DTI and SEC Warning Against Pyramid and Ponzi Scams

The Department of Trade and Industry (DTI) and the Securities and Exchange Commission (SEC) issued a joint warning (“babala”) against pyramid scams, ponzi scams and related fraudulent schemes. The warning contains tips and pointers on how to identify fraudulent schemes.

A common fraudulent scheme are investments that promise “easy money,” “quick money” or “double your money,” with returns or profits that greatly exceed the rates offered in banks.

The DTI and SEC also identified other schemes or strategies that should alert the public to a potentially bogus investment:

* The investment is guaranteed to be “risk-free,” with 100% assurance of return of investment. The investor is usually pressured to immediately accept the “limited offer”.

* The money invested earns by way of recruiting other members into the business, instead of selling products.

* You are informed that you won a raffle or lottery, except that you didn’t join any such raffle or lotto.

* You supposedly won a prize or free gift, but you are required to pay a “shipping fee” or registration fee.

* You are asked for financial information that meant to be confidential, including bank account information, credit card numbers, PIN and passwords.

Should you make an “investment,” make sure to safekeep relevant documents like receipts, contract, agreements or “certificates”.

Make sure that the business entity is registered with the DTI or SEC. Investment products, on the other hand, must be registered with the SEC. For complaints or questions, contact SEC through 584-1119 or the DTI at 751-3330/0917-834-3330.

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