Warning! Investment Scams Checklist
This article is posted under General Information, Investing.
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:
- 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.
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)
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.
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.
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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