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How to avoid ‘get rich quick’ schemes and scams |

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How to avoid ‘get rich quick’ schemes and scams

BULL MARKET, BULL SHEET - Wilson Lee Flores - The Philippine Star

Bestselling author Dr. Steve Maraboli once said, “Get-rich-quick schemes are for the lazy and unambitious. Respect your dreams enough to pay the full price for them.”

It’s true. Get-rich-quick schemes — like corruption and gambling — are nefarious and corrode the moral fiber, work ethic, intellect and character of people, whether entrepreneurs or professionals. Let us teach ourselves that success is earned through working hard and working smart, not through shortcuts, cheating, fate or luck!

A reader of this column, Christian entrepreneur and founder of the 2,000-branch The Generics Pharmacy (TPG) chain Benjamin “Ben” Liuson, jokingly told me that there are three get-rich-quick ways to become super-rich in the Philippines: first, be a gambling or jueteng lord; second, be a drug lord; and last but not least, be a “Praise the Lord”!

Another Philippine STAR subscriber, the publisher of the 100-year-old Chinese Commercial News and printing-press entrepreneur Solomon Yuyitung, added: “You should also include the warlords in our politics!”

I thought about this joke, upon reading about the recent decisive crackdown by President Rody Duterte and the Securities and Exchange Commission (SEC), led by chairman Emilio Aquino, on the alleged illegal and dangerous investment scams by the religious cult called “Kapa Community Ministry International Inc.”

Kapa has allegedly defrauded many people of their hard-earned money and life savings totaling P50 billion, with the SEC warning the public that this group — hiding behind religion — did not have the appropriate secondary license for investment products, but still solicited what Kapa called “donations,” promising wildly unrealistic returns as high as 30 percent per month.

If it’s proven that this Kapa caper is indeed a Ponzi scheme, then this is a huge corruption case no less morally reprehensible than the worst plunder by depraved politicians, generals or bureaucrats! Can our justice system mete them life sentences or worse?

Corruption needs to be cleansed from our culture and systems in the Philippines, not only in politics and government bureaucracies but also in the private sector, even non-governmental organizations (NGOs), foundations or religious organizations.

There are many kinds of scams; here are some we should detect early on and avoid at all costs:

Ponzi “investment” scheme — Kapa seems to fit the description of a “Ponzi scheme,” a fake investment gimmick or type of fraud that attracts investors by paying high-interest “profits” to early investors, with funds generated from newer or more recent investors. This dangerous get-rich-quick scheme misleads investor victims into believing that high profits are gushing out of an existing business, or via product sales, or through other fancy concepts. 

This so-called Ponzi scheme can continue the fraud or illusion of a successful  company or business as long as new victims come in as investors with their new money and as long as many investors do not demand the full repayment of their “investments” but are okay to receive their “interest incomes” or “dividends.”

This type of financial scam victimizing many investors worldwide has become known as “Ponzi” due to the notorious American criminal Charles Ponzi, who shamelessly committed this fraud in the 1920s.

Warning signs that you might be investing in a Ponzi-style scheme: “investment” ideas that offer too-high interest “earnings” or “incomes” with little to no risks involved; if the firm or person is not duly licensed as an investment-taking entity with government agencies like the SEC; if the deal or scheme is too convoluted, secretive or not understandable; if they have no sufficient legal documentation or transparent contracts; if it’s hard to get your funds but they keep on encouraging you to just “roll over” or continue “investing” ad infinitum!

Charity, religious and medical scams — There are dishonest crooks who prey on the philanthropic or idealistic hearts of people, most often religious or senior folks, by concocting fake non-profit foundations or NGOs, fake charities or even fake religious causes to solicit “donations.” If the accusations of President Duterte and the SEC are true, then Kapa also falls under this category of despicable schemes.

Some scammers even take advantage of legitimate causes and tragedies like calamities, typhoons or earthquakes, orphanages and hospitals, etc., but we should always verify and counter-check information. Are they really non-stock, non-profit or just another selfish, shadowy business or money-making enterprise? Some of the world’s worst liars are angelic-looking, Bible-quoting, eloquent talkers of all ages, shapes and forms!

A medical scam is when scammers offer allegedly good cures, medicines or medical processes for ailments — even health or beauty or youth-enhancement potions. They not only sell you their products and processes, many of them want to ensnare you to be their agent or marketer, even showing off pictures or videos of their fancy cars and luxury homes to showcase their “success” in selling these wonderful “health,” “beauty” or “youth” products.

I’ve encountered these folks and just tell them off, saying I never drink or take any medicines or even vitamins without proper prescriptions or verifications by legitimate, licensed doctors. 

Online lottery, competition, shopping, bank, and credit card scams — Never give your personal data to online or social media scammers who say, “Congratulations, you’ve won this lottery, sweepstakes, etc.” but that you need to send in your detailed credit card or other information in order to claim the prize.

Some scammers claim to represent your bank, credit card, and insurance firms in order to obtain your personal information; don’t entertain them!

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Thanks for your feedback at! Follow @wilsonleeflores on Instagram, Twitter, and Facebook. Buy PhilSTAR’s Tagalog tabloid Pilipino STAR Ngayon every Friday and read my column “Kuwentong Panadero.” Read also

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