How to detect investment scams?

8/28/2015 Randomly Candid 0 Comments

Know the basics before it's too late.
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INVESTMENT scams, which are presently rampant, victimize financial consumers in the country.

As it proliferates in the market, the Bangko Sentral ng Pilipinas (BSP) is also intensifying its efforts in educating the public on how to avoid being victims of investment scams and make sound financial decisions to grow their money.

On Aug. 17 to 19, BSP’s Financial Consumer Protection Department (FCPD) brought “AlertoAko” Exhibit to Iloilo City to provide greater awareness through advisories on various financial products and services.

The financial consumer protection campaign is also a proactive approach to address the need of the public to identify financial frauds and scams.

FCPD director Atty. Prudence Angelita Kasala bared some tips on how to detect investment frauds and scams.


To make a sound financial decision, one should first know his financial needs, Kasala said. She noted that one’s investment should conform to his cash flow.

For example, when investing in a five-year bond, the consumer should first think if they have enough resources as bonds run for a fixed term.

Thus, before investing in any form of financial instrument, the consumer should assess first if he really needs to invest or the return of the investment is worth the risk.


The most obvious feature of an investment fraud and scam, according to Kasala, is the offer of higher yield compared to other financial instruments in the market.

The FCPD director also advises financial consumers to look at and compare the offerings of the bank, insurance and government securities.

“If the company offers very high returns, you should already ask where they get their extra income,” Kasala said.

She added that by asking that question, the consumers will know if the company has really an economic activity or legitimate source of income.

Kasala also stressed that a certain networking company could be a scam once the investors earn by recruiting people, rather than selling the products.


According to BSP’s advisory, consumers should already be suspicious when:

*they have been told that they won in a lottery or a raffle that they did not join;

*told to act immediately or lose the opportunity;

*been selected to receive a special offer, incentive or free gift;

*told to pay for the shipping fee of the prize or gift; asked to give personal information such as bank account, credit card numbers, PIN and passwords through email;

*the institution provides no written records or information of the transaction;

*the institution is not registered with or is not regulated by any regulating body;

*the company only provided mobile number as a contact information; and provides testimonials that have no way of checking out.

Yet, the best advice she can give to financial consumers is to look into the long-term horizon by investing in the right financial instruments.

She noted that stocks, bonds and mutual funds are good types of investments as they offer long terms and has financial experts who manage the investments.

“AlertoAko” is just one of the financial literacy efforts of BSP. The recently concluded “AlertoAko” exhibit in Iloilo City is the third leg of the campaign after Cebu and Manila.

BSP is also scheduled to bring the campaign in other key cities. (As published in Panay News)

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