Recently, we’ve been hearing several disturbing reports about new investment scams that robbed Filipinos of their hard earned money.

While their schemes are different — some allegedly invest in gold while others focus on selling beauty products — their results are the same: hardworking Filipinos who simply aim to raise their family’s standard of living end up losing tens or hundreds of thousands of pesos.

Pero sa kasaysayan ng lahat ng scams sa Pilipinas, may isang scam na nangingibabaw dahil sa laki ng perang nanakaw sa mga Pilipino: the Aman Futures scam.

Read on to learn how MASSIVE this scam really was and more importantly, what you can do to ensure that you won’t ever be one of the people who lose their life savings to scams like these!

Aman Futures Group. For the 15,000-or-so Filipinos who are just beginning to accept the fact that they have lost their hard-earned money, these three words are now synonymous with “nightmare.” Indeed, their plight is a frightening one they wish they have never gotten themselves into. But what can they do now?

 

Aman Futures Group: A Backgrounder

Bago pa sumikat sa Metro Manila, ang Aman Futures Group na pinangungunahan ni Manuel Amalilio ay nagsimula nang makilala sa Visayas at Mindanao. Who wouldn’t be hooked by its seemingly heaven-sent proposition: “invest” money with them, wait a few weeks or months, and your money will double or even triple.

Photo courtesy of PTV.

Photo courtesy of PTV.

Sa laki ng interest na pwede mo daw kitain sa kanila, magmumukhang maliit ang kita sa traditional investments.

At that time, the Philippine stock market, for example, had generated a year-on-year (from November 2011 to November 2012) return of 26.8%. That’s already considered above average.

Time deposits in banks usually offer a measly 1-3% interest per year, while bonds and bond fund investments offer yields of around 3-6% in a year.

Compare these with the “investment offerings” of Aman Futures Group:

One “investment product” yielded 62% return in just 20 days while another “investment” gave investors 70% interest in just one week.

Big bucks, quick money — who wouldn’t love that?

Kaya nga naman, itong pagnanais kumita ng malaki ang sinamantala ng mga may-ari ng Aman Futures Group. The National Bureau of Investigation (NBI) reported that at least 15,000 people have been victimized by the scam. At least P12 billion — yes, billion with a b — of cold, hard cash was involved and would most likely be difficult to recover, according to the NBI.

 

Ponzi, Pyramid, Scam — They’re all the same

Hindi ito ang unang large-scale scam sa Pilipinas. A quick look at the famous scams in the past would yield a handful of “online investment programs” — such as FrancSwiss, Phoenixsurf, and Performance Investments Products Corp. (PIPC) — and “offline double-your-money-schemes” — such as Mateo Management Group (MMG), Multinational Telecom Investors Corp. (Multitel), and Royal Manchester Five (RMF) — that proposed the same offering and had the same bitter ending.

All of them promised investors very high return and, in a matter of months, collapsed and ran away with investors’ money.

In fact, this scheme is so old that the generic term for such scam programs was coined back in the 1920s. Charles Ponzi ran an investment program in the United States wherein he offered a 50% return on investment after just 45 days. Since there really was no genuine business, Ponzi had to get money from new investors in order to pay old investors back.

Charles Ponzi

Mugshot of Charles Ponzi.

Hindi nagtagal, naging “pyramid” ito. The people at the bottom had to be so many in order to pay everyone on top of the pyramid. Once new investments had been insufficient to pay for maturing investments, that’s when the pyramid collapsed.

Pyramid Ponzi scam

Hence, the name Pyramid Scam or Ponzi Scheme to describe that type of fraudulent program.

After years of seeing these scams proliferate in the Philippines as well, here are some lessons we learned.

 

Source: Pinoy Money Talk

Lessons learned

1. If it sounds too good to be true, it probably is.

 

Walang tunay na investment ang makakapagbigay ng napakalaking kita in the long-term. Yes, it’s possible to earn 50%, even 100%, in a week if you do stock or futures or forex trading, but this cannot be achieved week after week after week.

The concept of “investment” itself carries with it “risk” and part of that risk is the possibility of losing invested capital.

With the exception of savings and time deposits that are backed by the Philippine Deposit Insurance Corporation (PDIC), genuine investment programs cannot and should not offer guaranteed returns, especially if they sound too good to be true.

Kung napapansin mo, hindi nagpapangako ng guaranteed returns ang mga bangko at investment company.

Kaya pag nakarinig ka ng isang investment daw na napakalaki ng kita o interest at tuloy-tuloy daw ito in the long run, malamang ay scam ito!

 

2. Don’t let greed take you over.

 

For most people, the promise of high returns in a short span of time is truly irresistible. Thus, they are lured to invest or to add more on top of what they have initially invested.

Ang masama pa dito, iniimbita pa nila ang iba na mag-invest!

Soon, greed takes them over and they start thinking irrationally. At the back of their minds, they know outrageously high returns are not possible, but they continue to hang on to their dream of amassing great amounts of money without having to work hard.

Sasabihin nila sa sarili nila: “Titigil ako pag nabili ko na ang gusto kong bagong sapatos.” Weeks or months later, they’d be able to buy the shoes with the profits on their “investment” but greed would start creeping in.

Tapos, ang iisipin nila, “Siguro hindi masamang mag-invest pa. Titigil nalang ako pag nakabili na ako ng bagong cellphone.” Weeks or months later, they’d get the phone but, by then, greed would have already taken over.

Editorial cartoon courtesy of D. de Alcala.

Editorial cartoon courtesy of D. de Alcala.

In some cases, they would risk more than they could afford to lose and even involve the money of relatives and friends. Nasa isip nila: “Seryoso na ‘to, titigl na ako pag nakabili na ako ng bagong kotse.”

Unfortunately, the program would collapse before they could get out. The aftermath: shattered dreams, ruined relationships, and a sizable amount of money they could never get back.

Remember, don’t let greed take over. After all, one of the most important adages of investing is:

Investing comes with risk; invest only what you can afford to lose.

 

3. Budget your money so you know how much you can afford to lose.

 

You might be thinking: “How can anyone who’s not filthy rich have money that he or she can afford to lose?”

Maniwala ka man o hindi, maraming taong hindi mayaman ay may pera that they can afford to lose. Hindi lang nila ito alam kasi they don’t budget their money.

Budgeting your money shows you:

  • Where your money is going
  • If you’re spending too much on non-essential expenses
  • How much you can spend after setting aside your savings (Take note, we did NOT say “how much you can save after all you’re done with all your spending!”)
  • How much you can afford to lose after setting aside your savings and being able to cut your expenses

Keeping a budget for the first time is an eye-opener for most people because only when they start religiously measuring their savings and expenses do they see where their monthly income actually goes. And most of the time, it’s not a pretty sight, especially if you see that you’re paying Starbucks more than you’re paying yourself!

So remember to keep a budget and religiously measure your income, savings, and expenses. Sa ganitong paraan mo lang malalaman kung magkano ang pwede mo talagang ma-invest. At madalas, magugulat ka na may pera ka pala talaga na pwede mong i-invest!

 

4. Don’t get fooled again.

 

Aman Futures Group was not the first scam in history, and it definitely won’t be the last. Similar programs have and will continue to emerge in the future — and they will offer the same absurd promises. It now depends on you whether to believe them or not.

What we can only tell you is to conduct due diligence, do research, learn more about genuine investment programs, and never fully trust everything you see online or hear from your friends and acquaintances.

Pwede mo ring tignan ang website ng Securities and Exchange Commission (SEC) sa www.sec.gov.ph. May tips din dito on how to spot investment scams, like the checklist below:

4 - SEC Investment Scam Checklist

Moreover, they also share updated lists of investment scams posing as legitimate companies, like this one:

4 - SEC Scam Alert Advisory

Ignorance and greed have their consequence — and unfortunately, those who lost money in Aman Futures Group had to learn this the hard way. By following the learnings we outlined here, we hope that you’re now in a much better position to avoid being victimized by scams than ever before.

 

Having learned these Smart Money Tips, what other tips or lessons can you share? At ano pang scams sa Pilipinas ang nabalitaan mo na? Share them in the comments section below!

 

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Share your thoughts and comments!

Having learned these Smart Money Tips, what other tips or lessons can you share? At ano pang scams sa Pilipinas ang nabalitaan mo na?