Get rich quick schemes
We can all avoid being scammed. A good rule of thumb: when it sounds too good to be true, it usually is.
Photo: EC Toledo | Illustration: Ana Crescini

5 'get rich quick' scams in the Philippines, as seen in Netflix's 'Explained'

Ana Crescini (Philstar.com) - May 20, 2021 - 5:20pm

We've all heard rags-to-riches stories but the most compelling are those that transpired in an instant: that lottery ticket that made a factory worker a multimillionaire overnight or that promising one-time investment that allowed someone to travel the world.

Who's not interested in getting rich or at least having a little more than enough? But fortune is usually and more realistically built over a long period through a series of wise financial and professional decisions.

Still, it's a weakness of human nature to want to have more in the shortest possible time. That is also why financial scams work: they tap into the greedy and the impatient in us. We can avoid being a victim if we're more aware of our tendency to want a quick buck while also knowing how scams work.

These agents of deceit are bared on the pilot episode of "Money, Explained" mini-series—the latest of the "Explained" documentary franchise produced by Vox Media for streaming service Netflix.


The show reviewed at least five schemes we're recounting below because they have also been reported in the Philippines:

1. Advance fee scam

It starts with a call, message or pitch for some action on a victim's part with a promise for a handsome reward in the end.

This scam dates back a thousand years even before the internet was born. It has taken on many forms, eventually adapted to email and social media, but has not disappeared. Why? Because many people are still falling for it. The fraudsters are still making money from human beings' innate weakness to detect a lie.

2. Pump-and-dump

Also called price manipulation, this one is "slightly more complicated," the host says, "and way more fun to say." It involves a market, be it a crypto coin or a small stock that can easily budge.

An individual or a group of stock or crypto insiders persuade people to "invest in something that's worthless" and then when the price reaches a peak, they sell it off and cause a crash.

The entire cycle of a pump and dump takes minutes, the show explains.

3. Ponzi scheme

"Double your money in 60 days, guaranteed!" This how many Ponzi schemes' empty promises sound. It's named after Charles Ponzi, an Italian swindler, who convinced people to invest in a product or endeavor for unrealistic profits.

In Ponzi schemes, earlier investors are paid with cash borrowed from later investors, as in this piglets deal busted just last month and other online paluwagans or OnPal. The chain goes on and on unless all the investors cash in at once, like what happened to the most infamous Ponzi scheme in recent memory—Bernie Madoff's.

4. Pyramid scam

Pyramids are similar to Ponzis in that they involve endless recruitment. Only in a pyramid scheme, the fraudster does not borrow money from later participants to pay Juan, but Juan is paid if he convinces Pablo to join the scheme. For Pablo to get paid himself, he has to recruit Pedro. When Pedro does join, both Pablo and his recruiter, Juan, get paid.

The network of recruiters and recruits who also become recruiters breaks down when later recruiters fail to get people to join. A multi-million pyramid busted in 2018 in Mindanao posed as a rent-a-car marketing business.

5. Coaching scheme

Coaching or tutoring claims often come with an attractive proposition: "you can make a fortune without needing money!" or "If you buy that ebook and attend that program, the knowledge you gain will make you rich... quickly."

But instead of delivering their promises, the classes or books or sessions are staged to make a customer or mentee pay for other classes and books and sessions. The versions we saw in the Philippines also involves a promise for recruitment abroad. Coaching scams attract subscribers because they:

  1. Tell "compelling rags to riches stories."
  2. Exhibit "testimonials from supposedly happy customers."
  3. Create a sense of urgency or exclusivity.


We can all avoid being scammed. A good rule of thumb when we encounter the above scenarios is: when it sounds too good to be true, it usually is.

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