While browsing and reading online about the basic of investments, I came across to SEC (Securities and Exchange Commission) official website and found this checklist very helpful. Especially for newbie Filipino investors, this will definitely give you another valuable idea to avoid investment scam here in the Philippines or even abroad.
Having advance technology today, scammers can easily spread their ‘modus‘ and fool Filipino investors to gave in and fall in their trap.
The investment scam checklist below will provide you basic information to identify if the investment offered to you is a scam or not. I also wrote 3 tips to avoid financial scam in the Philippines before, you can check it out.
“If it’s too good to be true, it might be a scam“. This is what we normally hear from the experts. The promise of ‘high returns in a short period of time‘ is very tempting that’s why many Filipinos fall into this kind of trap.
We should always remember that all investments came with risk. The higher the returns, the higher the risks involved. We should be vigilant in knowing the ‘true story‘ behind those sales talk and promises.
To give more information on how we can avoid investment scam, here’s a checklist provided by SEC.
Got offer of high or fantastic earnings on investments or some business opportunities? Think, examine, and diligently study the offer!
If you come across any investment offer by phone, e-mail, flyers, newspaper ads, or directly by any person, or by any other means, you must ask questions to protect yourself and your money.
How? SEC advised to get the following information:
A. Name of the person and the company making the offer
Of course, a smart investor do not transact with unknown individual. You must know the person personally to avoid investment scam. Be cautious if you got an investment offer from the person you didn’t know.
Make a background check. Even if you know the person, make sure you do due diligence in the company he/she work with.
Check the company’s information and make sure they are legally authorized to conduct business.
B. Address of both the person and the company
Knowing the person’s and company name is not enough. Make sure you also know the address of the person as well as the address of the company.
Scammers usually not providing valid address to hide their modus. Be vigilant in checking this information to avoid investment scam.
C. Phone number, particularly the land line. Do not accept cellular phone number(s) — the owner cannot be traced.
Valid phone number is very important in conducing legal business. SEC advised to check phone number specifically landline to avoid investment scam.
Make sure you can contact them when you have questions or clarification about the investment.
D. SEC Registration as an investment taker
A legal company or investment company needs to be registered in SEC.
Additionally, it also needs to be registered in other government agencies concerning business operations here in the Philippines. Agencies like BIR, DTI, SSS and the like are needed in legally registered business or investment company.
BUT, here’s the big but, you should keep in mind the following points:
SEC company registration does not grant authority to sell investment instruments, such as securities, bonds, commercial papers, or similar financial instruments.
Important!!! >>> Do not be tricked or 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.
The image below provided by SEC (taken from SEC website) can also help us identify investment scam.
By knowing the information above, we’re increasing our knowledge to avoid investment scam here in the Philippines or abroad. We should always keep in mind that scammers are everywhere.
By knowing this investment scam checklist, it will surely help us identify which of the investment offered to us are scam and legal.
All investment come with risks, and the more knowledge and information we have about that investment, it will help more to lower the risk involved.
Remember that the best investment we could ever have that can give us higher returns is investing in our selves first.