He noted that various scams are common in popular social networking sites such as Facebook. Some are based on pyramid schemes, where money from new victims is given to earlier victims to show that their initial investments are making a profit and to attract more investments.
"We should be prudent especially when it comes to money. Think twice before you put your hard-earned money into something, especially when it promises high returns of investment," said Aquino, who is Chairman of the Senate Committee on Trade, Commerce and Entrepreneurship.
Aquino spoke after the arrest of several individuals who were behind an investment scam advertised on Facebook. Another investment scam that duped 100 individuals of around P100 million was discovered recently.
Aquino spoke after the arrest of several individuals who were behind an investment scam advertised on Facebook. Another investment scam that duped 100 individuals of around P100 million was discovered recently.
A July 29 article in the Manila Bulletin sheds more light, describing a pyramid scheme advertised by a company called Upwarm on Facebook. Upwarm was found to focus on recruitment and did not actually sell products. In a typical pyramid scam, recruited victims would pay fees for being part of the scheme, variously described as registration fees, money for paperwork, or money to buy products, but would profit more if they recruited others than if they actually sold any products. A portion of the money from new recruits would be used to reward those who had recruited them, with the company pocketing the rest.
"Before investing, we must tread on the side of caution by checking with the Securities and Exchange Commission if an investment company is registered," Aquino said.
"Just to make sure, we also must ask for documents that will prove the legitimacy of a company's operation," the senator added. He also called on authorities to intensify their campaign against syndicates involved in other scams to prevent more people from being victimised.
"Before investing, we must tread on the side of caution by checking with the Securities and Exchange Commission if an investment company is registered," Aquino said.
"Just to make sure, we also must ask for documents that will prove the legitimacy of a company's operation," the senator added. He also called on authorities to intensify their campaign against syndicates involved in other scams to prevent more people from being victimised.
