A story on PinoyMoneyTalk described how once again some Filipinos have been fooled into investing in what turned out to be a scam: Royal Manchester Five.
It’s a very similar story that we’ve heard before. See the Francswiss story on eOFW. Promises of extremely high returns (4-5% per month) attracted people to invest from P200,000 to P3M each. The CEO and owner of Royal Manchester Five, 28-year-old Cyrus Hao, purportedly ran away with millions of dollars worth of investorsâ€™ money.
There are all sorts of ways people can get fooled into losing their money to scams. Some scams are MLM scams, some are high yield investment program (hyip) scams, some are ponzi schemes.
How can Filipinos and OFWs spot scams like these and avoid being victimized?
First rule: If it’s too good to be true, it probably is.
Investments that promise more than 4% per month must be investigated further.
Second rule: Check for a good track record.
Many scams thrive on a short and quick modus operandi. If the company is less than a year old but boasts of huge growth or assets, you MUST investigate further.
Third rule: Don’t decide on impulse or by pressure.
Most scams will claim that you need to give your money now now now, right now! No time to think, just invest now now now! If you are being pressured to invest immediately, it’s a sign that they don’t want you to consider the details of the investment.
Fourth rule: Do your research.
It’s as simple as searching the Internet for *legitimate* references to the company or person. Search for known news websites or similar legitimate websites that lend credence to the company. On the flip side, you may find out that others have already spotted the scam. See comments on “Panalo o Panloloko” article on Technobiography. Also look-up the company at the SEC, DTI or Board of Investments.
Fifth rule: Find the source of value.
As an investor, you MUST understand where the profits come from. Do profits come from services rendered? Products sold? Illegal activities? You don’t want to be finance a drug-dealing operation, do you? Make sure you understand where the money (the value) is coming from.
Lastly, follow your gut. If you feel in your gut that there’s something fishy about an investment, verify verify verify. Take 100% responsibility for your decision. Do not blame the friend who invited you (he/she is probably a victim too).
With that, Ingat!
John Ka Edong Lloyd
eOFW is not related in any way to the companies featured in our articles except otherwise specified. We feature different companies for the information of our readers to help them better find services that suit their needs.
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