Every investment carries some risk, but that doesn’t mean you should gamble carelessly. You don’t want your hard-earned money to be used in shady frauds and scams. Unfortunately, many investment scams in the Philippines are trying to lure you into earning easy money.

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Don’t fall for the trap and learn how to spot investment scams. Check out the following list of warning signs:

1. Not SEC-registered

The Securities and Exchange Commission (SEC) is the agency responsible for protecting the interests of investors and consumers. Always check if the investment company is legit by checking if it’s SEC-registered. Note that not all SEC-registered companies are allowed to offer investment products. They need a license to sell to do that. The SEC has a list of companies authorized to offer investment products on its website. You can also directly ask the investment company for the following documents to prove its legitimacy:

  • SEC Registration
  • License to sell investment products from SEC
  • Company’s name and owner
  • Address of the company and the owner
  • Landline number (not cellphone number, as this is hard to track)

2. Promise of “Super high and impressive” ROI

If something seems too good to be true, it probably is. If the company offers you 50%, 80%, or even more returns in just a week, chances are it’s a scam. This offer is called “phantom riches,” where they lure newbie investors into putting in large amounts of money. Remember, earning through investments is no magic. It takes time, knowledge, and good management. It’s best to research some of the best legit investment options for newbie investors.

3. No permanent physical office

Check if they have a physical office and if they have been there a long time. A simple clue is that you won’t find investment companies in the department store. They have a legit office with a well-organized workforce. Companies operating off-shore are also suspicious.

4. Pushes you to recruit more

If the company’s success relies on the number of new recruits, chances are you’re in a “Ponzi/pyramid scheme.” Investors are lured to earn more by recruiting more and more new recruits. While this may work among the first few investors, it’ll surely burst as the money dwindles if there aren’t enough new recruits.

5. Check online

The most basic form of research is online. If they have a website, check if it looks legit and professional. Complete information about the management of the business, its location, or the specifics of the investment should be provided. Look into reviews, client testimonials, and other information.

Always be wary of investment scams. Before you know it, your investment is gone in a blink. Don’t invest in products you don’t understand. Be wise and do research. Good luck!



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