Warning! Investment Scams Checklist

Posted by Fitz Villafuerte under General Information, Investing on November 30, 2012

I believe in the general goodness of people, that’s why it’s always heartbreaking to read about news stories on investment scams in the Philippines.

So as a public service to my fellow Pinoys, I’d like to give you below the following tips on how to spot, avoid and report an investment scam to the proper authorities.

Please note that this guide is specific to the Philippines only, investment scams that are being run in other countries are not covered here.

What To Do When Someone Invites You To Invest In A Company:

First steps:

  • Get the name of the person, and the full name of the company he is representing.
  • Get the address of the person, and the complete office address of the company.
  • Get the landline number of the person, as well as the company’s office. Do not accept a cellular phone number.
  • Request for a copy of their SEC Registration as an investment taker.

Anyone can get an SEC registration, but it’s harder to get one that grants them the authority to sell investment products.

Again, a basic SEC registration simply means that they are a registered corporation. They NEED TO HAVE an SEC registration as an investment taker to be able to sell financial products.

From the Philippine Securities and Exchange Commission website:

  • SEC company registration does not grant authority to sell investment instruments, such as securities, bonds, commercial papers, or similar financial instruments.
  • Do not be tricked or be tempted by offers of promissory notes or post-dated checks which will be issued in your favor to allegedly ensure the payment of earnings and the reimbursement of your investments.
  • Only investment houses and financing companies with QB (quasi-banking) license and with SEC registered securities may offer to sell the same to more than 19 investors.
  • Only SEC registered persons (brokers/dealers/sales man) may offer or sell SEC registered securities to the public.

Next steps:

DO NOT DEAL WITH THEM IF:

  • They are unwilling or hesitant to give any of the information above, OR
  • They have no SEC registration or appropriate license to engage in investment activities

If they claim to have QB (quasi-banking) license or SEC registered securities:

  • Get more information such as the number of investors, minimum placement and potential rate of return. Remember that low risk, high yield, fast cycle investments are usually a scam.
  • Check and verify the name of the company from the list of companies who may offer investments from the SEC. You can check the list of registered entities HERE or call the SEC public information and assistance hotline at 584-11-19.

Again, DO NOT DEAL WITH THEM if they fail to give the information above or if they are NOT listed with the SEC.

What if all checks out so far?

Then do one last due diligence and call the SEC Corporate Finance Department at 727-29-50 or the Market Regulation Department at 725-81-76 to make sure that you are dealing with a legitimate investment company.

What To Do If You Suspect An Investment Scam:

  • Report immediately to the SEC-CED (Philippine Securities and Exchange Commission – Compliance Monitoring and Enforcement Department) at telephone number 724-76-50 or 727-22-67
  • Call the NBI (National Bureau of Investigation) or your local district police (for emergency situations only)

Final notes:

Companies that offer insurance with investment features is covered by these regulations. This means if you’re planning to get a variable universal life insurance (VUL) or other similar products, then you have to make sure that they are in the SEC list.

I recently invested in the Kaiser Premium Health Builder – it’s a long-term health insurance with investment benefits from IMG (International Marketing Group).

For those who also bought that plan, and is concerned about their legitimacy, then you should know that they are actually listed with the SEC with the appropriate licenses. I actually checked that, so that’s good news for us. :D

And lastly…

To all the Philippine investment scammers out there:

We all want a better life, but please do not lead people into fraud and promise them quick and easy money just so you can have yours.

Understand that there is always a fair and honest way to make money – so please be the good person I know you are deep inside and stop robbing your fellow Pinoys of their hard-earned income.

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7 Responses to “Warning! Investment Scams Checklist”


  1. Edmund Lao says:

    The best way to avoid scams is to ignore any investment opportunities except when the opportunity comes from legitimate and reputable companies who have been in the industry serving people for the past decades…

  2. Leonard says:

    I remember how glowingly a friend described the investments with Aman Futures. Skeptical, I asked how they could guarantee huge returns, and he said it was because they invested in high risk, high yield commodities. I then remembered your earlier blogs about investments, and knew it didn’t make sense: not even the experts in investment firms, multinational insurance companies, or respected banks, could guarantee a huge yield. Besides, the words “high risk” indicates the very real possibility of losing your shirt altogether (as thousands of people eventually found out) and bringing it all together, it is inconceivable that even with expert investors, they could not possibly guarantee a fixed time period to reap such a huge return. I told him it was a pyramid scam, plain and simple. His answer was to show me that he earned over half a million pesos only. That was months ago. Now, the pyramid has collapsed and my friend is wiser, albeit 8-10 million pesos poorer.

  3. Hi Fitz, I identified some SEC-registered companies but are confirmed to be involved in scams and unauthorized activities. http://burngutierrez.com/alert-new-scams-to-be-wary-of/

    People should not be blinded by these companies showing off SEC or DTI certificates to back their legitimacy. The wisest answer to these unscrupulous scammers when offered their tempting investments is “Give time to think it over. Say, 10 years.” :D

  4. greenie says:

    hi fitz, been a follower of your blogs.
    went to IMG for the free seminar you mentioned. i am interested in registering with kaiser as well but reluctant since i am not sure if this isnt a scam. not sure what to check out before registering for the succeeding series and further info. thanks for this blog. more power!

  5. MICHEL MAUDET says:

    Is Sofia properties that give 1% monthly interest on fund investment have a proper SEC registration ??? I am interested but scare if it is a scam .Earning 12% yearly interest and especially 1% monthly those days is rare now so I want to be sure that is the right deal

    Kind regards

    Michel

  6. Ethel says:

    Two thumbs up! You are giving invaluable Info that I am willing to share to anyone who’s willing to listen, yet the problem lies in the people who made the choice not to educate themselves first. I have tried to relay my experience in stock trading and the promising yet modest gains I had this year, but they think it is far from being achieved, matrabaho daw or so they would excuse themselves to do other task, I guess it is easier if some one will handle it for them. In my opinion, the investments scams come about this way, less work bigger income was the more suitable idea for the victims who had no time to do research. Simple but BIG words are used, but truth is – earning money is really complicated.

  7. Aram Durphy says:

    It’s important to remember that if it sounds to good to be true, it probably is. Most investments with reasonable risk attached will have reasonable returns, that are not guaranteed.

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