(We can’t be too careful in protecting our homes from “intruders”. File photo from Agence France Presse)

It was funny on television. You know, the one that showed a helper blowing the scam artist’s cover with her employer’s IDD caller ID? But in real life, it didn’t make me laugh.

I never thought it would happen to me, but it did a few years ago. Then yesterday, a friend sent an email to tell me the Dugo Dugo Gang is still alive and that she had been victimized that day. I thought, they are still alive??? And how in the world do they manage to victimize so many people when their modus operandi is very well-known!

We both thought it would happen to someone we knew, but never to us. In my case, it happened several years ago. Someone called the house while I was away, pretending to be my husband. He said he was in a car accident, injuring a young kid and that he lost several teeth that is why he couldn’t speak well. Then he instructed the maid to get jewelry and cash from “the drawer” and bring these to a particular street corner in Caloocan or else the kid’s parents would ask the police to put him in jail. (Nice little detail to add some pressure huh?) He also asked her not to let me know where she was going because I have a heart problem. Oh, and he added that because our youngest son was sick that morning, the maid should bring him along. The last detail just made me freeze all over.

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Are all schemes premised on multiple investors fraudulent?

Chew on that one. Noet Ravalo tackles this question from one of INQUIRER.net’s readers. The reader also asked if there is a way to set up a legitimate business that can fight the stigma that Francswiss created. Read the article here.

Here are my favorite parts:

The real issue boils down to where we draw the line between a scam, a dream that is otherwise not viable and an untapped business opportunity. This is where the regulatory framework comes in. Financial regulations exist to tell us what is allowed and not allowed. Some of these rules may be a “constraint” to the business opportunity but by and large I am convinced that these rules are needed to protect the great majority who need them the most. Why do we need protection? In the scheme of things, investors are at the bottom of the information chain. Since we do not run the business day-to-day, we are farthest in the chain and would therefore miss out on important details or know of these on a delayed basis. For this reason, investor protection is a central tenet in securities regulation worldwide.

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Our personal finance article for today has been long awaited by many INQUIRER.net readers.

Credit card debt is a common problem. Being mired in debt does not mean a person is evil – it only means that person has not managed money well in the past. That’s all…

So, what to do when you’re already in the clutches of a debt collector? Being badgered by someone to pay credit card debt is depressing and demeaning especially when they start talking to your officemates, your relatives and even your boss! This article lists down ways to deal with it, but my favorite tip is to call them first before they call you.

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So, you made money in a Ponzi scheme. It was a gamble you took and you went into it with eyes wide open. No big deal, it was your money anyway.

However, chances are you convinced your kumare, your cousin, your officemate, and your driver. It was their chance to get rich, you said. Hey, they made some money too — for some time. Unfortunately, bad people like the media and the government tried to get their cut and the entire thing went up in smoke. You shrug and say, I only invested what I could afford to lose.

Sorry to say, the happy story does not end there.

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Hot off a press conference at the Securities and Exchange Commission: The SEC, the Anti-Money Laundering Council and the SM Investments Corp. are warning the public against investing in SMFund.com, another online Ponzi scam similar to Deutchfrancs and Francswiss.

“Nobody can be blamed for wanting to earn high returns. Unfortunately, scam operators are trying to get rich quickly at your expense. Investors in these operations are the ones getting poorer. We are warning the public not to fall prey to this scam,” AMLC executive director Atty. Vicente Aquino told reporters.

Lawyers from SM Investments Corp. owned by mall king Henry Sy also told the media that the company was considering filing a case against felt SMFund.com for using its trade name committed infringement of its trademark, and that they were coordinating with the SEC on possible courses of action (my bad. its very hard to pin down lawyers, whew, and this is the only wording they like). “We are not in any way connected with this company,” Atty. Corazon I. Morando, senior vice-president for legal and corporate affairs of SM Investments Corp. said. In fact, Morando’s team also discovered another website called SMInvestment.com “under construction” and this website was also disowned at the press conference as well.

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Quiz. Tell me what is wrong with this logic.

What’s wrong with Ponzi and HYIP schemes? They can make Filipinos richer and give us better returns than the paltry interest the banks are giving. Earnings from them can send our children to school and build our houses. If we know that they are risky and still want to plunk in our money, then we have the right to invest. After all, it’s our money.

One answer. After this, I will not respond to any comments why Ponzi schemes are a scam, why they should all be closed and why they will all close shop whether or not the government succeeds in bringing them down. Blog entries in MoneySmarts and comments from people like Jon Mariano, Photon and Pinoy Investor have been crystal clear. Those who choose to invest do so only with greed as their motivation.

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I just got off the phone with Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. He is warning the public about Suise Financials (http://deutchfrancs.com), FrancSwiss Financial (http://www.francswiss.biz/) and other high-yield investment programs (HYIPs) in the Internet.

“It’s an online Ponzi scheme. The Bangko Sentral, in coordination with the Securities and Exchange Commission, the Philippine Stock Exchange and the National Bureau of Investigation, is looking into this,” he told MoneySmarts.

Ponzi schemes promise abnormally high returns that are paid, not through income generated from any real business, but from money coming in from new investors.

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Noet Ravalo wrote an excellent piece today on scams and how to do a quick sniff test so that you don’t end up being victimized by crooks.

An email writer also tipped MoneySmarts about a company that’s offering investment schemes with fantastic returns. I’m in a fighting mood today, so let’s see if this company passes our smell test. After all, if a company offers a legitimate investment option, it should be able to survive public scrutiny, right?

The company goes by the name Suise Financials, oddly similar to the name of Zurich-based investment bank Credit Suisse Group. Don’t confuse the two. They are not related.

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The small group of people huddled together at the huge lobby of the 5th floor of the Bangko Sentral ng Pilipinas stuck out like a sore thumb. Some were retirees, others were businessmen, homemakers, young couples – there really was no single word to describe most of them except they were all desperate…desperate to get their deposits back.

A big part of a financial journalist’s life is interviewing all sorts of people. Normally that gives me such a high because I’m endlessly curious about everything, anything and anyone. But somehow, talking to victims of banking closures always left me depressed.

I still remember that day very well. The 1997 financial crisis caused quite a few banks to go belly up and this bank was one of them. Desperate depositors came together to plead to the central bank to do something.
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Summer and scams – what bonds them together? Raul J. Palabrica, SEC commissioner and former Reader’s Advocate of the Philippine Daily Inquirer says con artists are more aggressive in the summer. He wrote:

What is it about summer that encourages con artists to come out and try to bilk unwitting Filipinos of their hard-earned money?

Perhaps, the hot weather has a way of making people drop their guard and become prey to glib talkers. The relaxed atmosphere may have something to do with it. With school over and the children on vacation, most parents (especially those who do not suffer from financial problems) are in a giddy emotional state.

Read the rest of his column here:
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