Sunday, July 15, 2007
Philippine High Yield Investment Scam
Recently a company called FrancSwiss made headlines in the Philippines after being exposed in the media offering a fantastic investment return of 4.5% daily for a minimum investment of $1,000. Whats more, for each person you have recruited will earn you an additional 10% of the amount your downline has invested. Currently, FrancSwiss has already shut down and is now being investigated by the SEC and arrest have been made for the recruiters of this company. For those of us who are familiar with pyramid schemes this is another variation called High Yield Investment Programs or HYIPS which rely on new money coming in to pay their existing investors.Typically these program will claim that they are into forex trading and will offer an incredible amount interest for you money that no real business model could sustain. At first, the program will religiously pay their investors and offer big commissions for each person you have recruited. When word gets out that the program is consistent in paying their investors, more and more money will come in from people because the trust level has already been established with hundreds or even thousands of people offering convincing testimonials. The cycle continues until there no more people to recruit and the whole thing collapses. But before that happens, the owner of the program will already have disappear along with the millions of pesos leaving their investors devastated and empty handed especially for those who have invested their life savings into them.
With scams like this popping up all over, how can people tell which companies are offering legitimate investments opportunities? First and foremost we must remember the golden rule, if it sounds too good to be true, it usually is. Like the case of Francswiss, there is simply no business model that can consistently net you an ROI of 4.5% daily . If there is, you will see business tycoons like Henry Sy and Lucio Tan investing in these programs, why bother going all through the trouble of building a mall or running an airline when you could pour in all your money here and earn 4.5% daily without the hassle of labor and operational problems. Conduct a through investigation of the background of the company. Is this registered in the SEC? Who are the incorporators? How can I get hold of them? Every precaution must be taken before sinking our hard earned money because times are though and money is not easy to come by these days. It really saddens me to see people who have invested their life savings into these programs with the dream for a better future for their family, only to turn those dreams into nightmares. The government must use the full force of the law to run after these crooks who scammed people out of their life savings.