Confessions of a scam magnet

(Scam artists can make frogs look like princes in 10 seconds, so just walk away. Photo from AFP)

It’s true. I’ve been scammed several times. Don’t laugh at me, okay? This is a public confession of my extreme stupid moments!

When I was a college student, I gave the gold necklace I was wearing to an old lady I met at the Shopping Center in the University of the Philippines who said she would only “borrow” it so that she could pay someone to open her car door. For some reason, she was locked out and could not go home. Duh moment! She spoke in even tones and was very persuasive, but let me tell you it was my stupidity that got the better of me. She looked pretty decent, too.

That was a pretty simple scam, but con artists can get creative in their efforts. Another fraudster was a contractor for a big telecommunications company who installed our DSL modem. He seemed like a harmless guy and I didn’t think there was anything wrong in telling him about my line of work as well as my husband’s. Besides, he was in my home on official business. Unfortunately, he was part of a gang that preys on househelp. He or a member of his group pretended to be my husband, gave a story about being in a car accident and instructed the househelp to bring cash and valuables to a shady place in Caloocan, a city just 30-minutes away from us.

A few days before they made the move, I remember receiving a call from Equitable PCI bank (allegedly) asking to talk to my husband to “update their bank records.” That should have been a warning sign. Banks DO NOT call clients to update records. They just pop letters in the mail to do that. On hindsight, I realize that they were trying to figure out which one in their group could pass off as my husband on the phone.

These con artists also prey on greed. Read one of the most-visited post on this blog about Francswiss and scroll down to the comments section if you want to be blown away by the greed factor.

Scams are everywhere. On the Internet, they have become extremely virulent. They start with simple emails on winning a lottery, a chance to win free money from big companies (usually Microsoft or Yahoo). They make people say “What’s the harm in that?” and “What if it were true?” But these emails harvest your addresses and put you on crooks’ lists of “people to dupe.”

There’s only one thing to do about these things: walk away. Forget the free money; forget the high interest.

More tips on our personal finance article “How to smell a scam.”
Here are some warning signs:

1. The investment plan offers or guarantees an interest rate that is much higher than prevailing market rates. In fact, these rates may be too good to be true. Beware of promises such as “50 percent return in 90 days,” or “double your money in 1 year.” These are unbelievable rates of return which the legitimate investment market will not be able to give. Before signing up for an investment plan, study the prevailing market rates. Long term time deposit rates can go up as high as 6 percent per annum. Research on the Internet and go to legitimate websites of Philippine banks and financial companies and see how their mutual funds and unit investment trust funds are performing to give you an idea of the yearly average rate of returns. These may run up to only 20 percent per annum. Clearly then, a 100 percent return on your investment is very fishy.
2. The company does not take time to explain the concept of the investment thoroughly and pressures you into making a decision. They may give you testimonials of “satisfied” investors and just make a quick run down on the kinds of investments they will handle for you. Or they present you with awesome presentations of high risk investments you are not thoroughly familiar with, such as accounts receivable factoring, dollar hedging, commodities trading, etc., capitalizing on people’s unfamiliarity with such forms of investments and promising high returns.Before you get into any investment, you should be given all the details of the offer or plan. You should also be given as much time as you need to study your options. Don’t ever be bullied into making an investment decision.
3. The company has no track record. When you get an investment proposal from a company you have never heard of, be extra cautious. Find out all that you can about the company: who started it, when was it incorporated, and what is the track record of the company so far. Some scammers may brag that they are a new offshore branch of a company based abroad that is why they have never been heard of. That’s even more reason to be cautious.You can get information from the Securities and Exchange Commission, and from knowledgeable people among your network. When in doubt, do not transact business with that company. Instead, deal only with banks and established financial investment companies.
4. The company does not have a physical office address. If the company is legitimate and will handle investments from many people, they have to have a reputable office address, one that you can go into at any time of the day, or call by phone anytime during office hours. Take note though that there have been some companies with physical addresses that still turned out to be swindlers so be careful.When you do finally invest, you have difficulty getting your money after some time. The returns may be very attractive at first, but in the long run, their checks may start bouncing, or you may be given promissory notes for the returns promised to you. Or they suddenly impose strict procedures, such as not allowing withdrawal for a very long period of time contrary to what was explained to you at first. When any of these happen, contact the Securities and Exchange Commission right away.

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