4 tips from PNoy on avoiding pyramid scams

4 tips from PNoy on avoiding pyramid scams 

Below are some of President Aquino's advice to investors on how to detect money scams: 

1) You can't explain how the interest is earned.

Avoid Investment Scams

Aquino said he understands why people are enticed to invest especially when the promised returns are high. Aman allegedly lured investors with promises of up to 40% returns in just 20 or 30 days.

The President said that if you cannot explain how a company is able to afford such high interest rate, it is best to step back. "Para mabayaran ka ng ganito kalaking interes, paano niya babayaran ito? At ‘pag hindi mo masagot nang maayos ‘yon, malabo siguro itong pinapasukan mo," he said. 

(For the company to be able to pay you such high interest, how can the company afford that? And if you can understand that question clearly, then what you are engaging in is probably unsafe). 

The company said profits were produced by a Malaysian brokerage firm Okachi (Malaysia) Sdn. Bhd. -- with whom it had a customer agreement -- and which engages in trading commodities such as oil, manganese, palm oil and nickel. 

2) It seems 'too good to be true' 

Comparing companies that promise investments to legitimate banks is another way to detect a sketchy proposition. Aquino pointed out that when you deposit money in a bank, savings interests are only about one per cent per annum or less. 

Companies that offer exponentially higher rates are suspicious, he said. 

He offered advice he received from his parents as a child. "So ‘nung bata ako sinabi sa akin ng mga magulang ko, 'If it sounds too good to be true, it probably is not true'," he said. "Sana makatulong na talagang (kapag) ang ganda-ganda (ng) inaalok, malamang hindi totoo." 

He said he hopes Filpinos would take this to heart to avoid temptation. 

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