Scams continue to abound
BIZLINKS By Rey Gamboa (The Philippine Star)
Updated January 22, 2013 - 12:00am
The Aman Future Group scam only shows us how desperate so many Filipinos
are to earn a little bit more for money they had worked so hard for.
Even up today, it surprises me to hear stories of former colleagues and
friends – some of them rising to top management levels in big reputable
companies – risk their hard-earned retirement benefits on investment
schemes manned by people they hardly know.
These are people who are familiar with words like pyramiding or Ponzi
scheme, and yet completely forget the perils that could burn them should
they engage in these sugar-coated offers of a return on their money of
higher than 10 percent a year.
Bogus schemes
On the other hand, many of the companies that had eventually become
platforms for investment scams started as legitimate, sometimes even
reputable, ventures that had never in their early years (or months)
thought about duping or hurting anyone.
And yet, these had somehow morphed in quick time to become the monsters
that turned out to be the cause of deafening wailing and gnashing of
teeth by individuals and their families who had woken up one day
realizing they had lost all their investments.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
Some of these business ventures had started with dreams of becoming
financial empires through some form of trading or manufacturing. But
somehow, in their search for capital to fuel the growth of their
ambitions, they stumbled on the principle of pyramiding.
Others, though, were fully aware that the "investment plan" they were
offering was plainly bogus, and that at some point in time, the pyramid
that they were building was going to crumble and fall, and that they
would have to flee and hide from the law and their victims.
Watch the video of Global Money Philippines as posted on YouTube, and
you'll understand how victims could have succumbed to its business
lending scheme and its avowed vision of "helping" others by being the
only lending institution in the world to give loans at zero percent
interest.
Warnings are too late
By far, it is the Securities and Exchange Commission that has been
trying to mount a campaign to warn the public about fraudulent schemes
by issuing bulletins against certain organizations or individuals
without the necessary legal legs to stand on in the event that these
"accused" personalities file harassment or prejudicial cases.
Truly, the SEC can really only do so much. First of all, many of these
scammers operate without business permits, and the only time that our
regulatory agencies are able to sniff them out is when they have already
accumulated a fairly large amount representing thousands of victims.
"Investors" often do not want to talk for fear that the pyramid would
crumble when they still have not collected their initial capital outlay
from the "venture."
While the Internet abounds with blogs and websites of concerned
Filipinos warning against these scams, not many are able to view these.
And then again, the cautionary statements and confirmation of these
dubious offerings often come too late in the day.
Preparing for retirement
If it's any consolation, Ponzi schemes and similar scams are not
indigenous to the Philippines. They prey on citizens even of developed
countries like the US or Australia. They feed on the despair, greed and
ignorance of the rich and not-so-rich.
Warnings by regulatory agencies, online postings, friends and even
family will fall on deaf ears especially if the victim's or intended
prey's self-interest or need clouds the mind and heart.
One good way of isolating these kinds of scams is for people at an early
age are able to start planning for retirement. This means that they are
able to save the right amount that will ensure that they can continue to
live comfortably in their old age.
This holds true also for our overseas workers. While working abroad,
they should already have in place a personal financial plan that they
could rely on once they opt to remain in the country, not necessarily
when they are of retirement age.
It goes without saying that Filipinos must have a healthier respect of
entrepreneurship to fully understand that there is no business
proposition that can promise a 60-percent return on investment annually
unless it were involved in some dubious activity.
Transparency and enforcement
SEC chairperson Teresita Herbosa is to be admired for having the courage
to issue warnings to the general public about activities that resemble
fraudulent schemes. By citing the base of operations without identifying
the persons or company involved, the regulatory agency is able to
preempt the spread of these scams.
But the SEC's warnings are still not able to preempt people from getting
hurt. Perhaps more timely action by local government units, especially
on questionable investment offers in cities outside of Metro Manila
operating without a permit or not registered as a business, should be
apprehended earlier.
The SEC as a regulatory body is trying to be as transparent as possible
in helping people identify spurious companies that are feeding on
fraudulent investment deals. It is up to the enforcement agencies then
to be on the lookout for these activities, and to be able to act swiftly.
Role of media
Media can also play a vital role in providing sufficient advance warning
to prospective investors. Information about previous scams should be
regularly featured so public memory is sufficiently refreshed about the
modus operandi of schemers. It would also help if updates are reported
on the progress of prosecution of persons previously apprehended and
facing court action.
Of course, it would really be an effective deterrent if prosecution of
guilty parties is hastened and their convictions made public.
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