Personnel from the Central Visayas offices of the Regional Special Operations Group (RSOG-7) and the National Bureau of Investigation (NBI) retrieved ledgers, journals and other documents from the Kapa office in Barangay Poblacion, Compostela town in this June 10, 2019 photo. /CDND File Photo
CEBU CITY, Philippines–The Securities and Exchange Commission (SEC) said that many people are easily lured by quick-rich offers, the reason why they remain susceptible to fraudulent investments schemes. This is especially true nowadays as most, if not all, groups use social media effectively to convince potential investors to shell out huge amounts of money.
Kapa Community Ministry International Inc., for example that started operations in Bislig City, Surigao, quickly expanded their operations because of massive social media recruitment.
In an advisory issued on May 31, 2019, SEC said that investors have been turning towards social media like Facebook, YouTube, Twitter, LinkedIn and other online networks for information about investing.
While SEC already warned public that Kapa did not have authority to solicit investments, the group continued to grow its membership by promising a 30 percent monthly return on their investments.
Read More: RSOG, NBI-7 search Kapa office; confiscate members records
Investors did not know they fell victim to a Ponzi scheme, where the organizers promise investors that they would get high returns on their investments. But what actually happens is that investors get paid from funds raised from other investors, said the SEC advisory.
However, a Ponzi scheme requires continuous flow of money to pay those who had invested earlier. A Ponzi scheme is just one of the investment scams used by fraudsters, SEC advisory said.
The new SEC advisory also listed 22 other ‘investment companies’ as among those offering high-earning investment products. These companies offer their investment contracts in the corresponding Facebook pages or secret Facebook groups or chat room, YouTube. They also offer unrealistic return on investments ranging from 100 percent to 400 percent.
These firms also require their interested investors to pay their initial investments by depositing their money to a specific bank account, Coins.ph account, Gcash, through a money remittance company and through face-to-face payment with one of their agents.
After this, the investor will send through a private message a scanned copy of the deposit to the Investment firm, which in turn will send confirmation through validation. The payouts are also done through these methods.
Read More: Lopez: Task force needed to address investment scams
The SEC said that this type of investment scheme usually collapses, leaving investors behind who are unable to recover their investments.
To help investors, the Commission posted “Investment 101” on its official webpage to provide tips that will help potential investors avoid investment scam. SEC says fraudulent investment schemes share common red flags. These are:
- It sounds too good to be true. Any investment opportunity that claims you’ll receive substantially more than that could be highly risky or be an outright fraud.
- The promise of ‘guaranteed’ returns. Most fraudsters try to convince investors that extremely high returns are guaranteed or that the investment is a can’t miss opportunity.
- Pressure to buy RIGHT NOW. Be skeptical of investments that are offered as a “once-in-a-lifetime” opportunities.
The commission urged investors to be on the lookout for fraud and contact SEC Enforcement and Investor Protection Department to report possible investment scams./dcb