Grow Your Money: When it's too good to be true, it is


Posted at Jul 17 2017 07:36 AM | Updated as of Jul 17 2017 08:38 AM

Have you ever received an email where a supposed prince is telling you that you can have thousands of dollars in cash but you need to wire him a small sum and provide your bank details? Or how about text messages saying you won a prize and need to call the person immediately?
Chances are, you knew right away that something is not right. Not only did the chance come from a totally complete stranger, the promise of riches was also too good to be true.
Unfortunately, people around the world still fall victim to such scams. Every day, police and investigators around the world receive complaints from people who have been lured into some form of investment scam. Given the sheer number of these scams and the many forms they come in, it pays to always be vigilant when receiving such offers.

To protect yourself from these scammers, here are eight signs you need to watch out for:
1. When the promised return of investment is too high.

If someone tells you that your money will double in one month in a supposedly risk-free scheme, watch out. High returns always come with high risks, which is what a legitimate stock broker or financial planner will tell you when you invest. In this low-interest rate environment, no legitimate financial institution can guarantee to double your money in a year’s time. Anyone who promises to do so is most likely a fraudster.
2. When the deal comes from someone you don’t know.

If this deal were real, then why is this stranger offering it to you instead of someone close to him? Ask questions. How would the company or person raise the money to pay you the guaranteed returns? Probe for answers. If the answer is too complex to be understood, then better run away from the deal.
3. When you are asked to send money in advance, usually through remittance centers.

Anything or anybody that asks you to send money straightaway through channels that require minimal documentation is a red flag. This means that there is no paper trail that will allow you to trace where your money went.

4. When there are no papers to sign.

Legitimate deals will always involve some form of documentation. Just look at the documents that banks require of you when you open any investment account, no matter how small. If you are being asked to part with funds without any kind of written agreement that has been notarized, at the very least, then run towards the opposite direction.
5. When it comes to you through email or text.

Fraudsters are trying to bait anyone using email and text, which often leave no trail in cyberspace. While legitimate financial institutions do send flyers and notices about their investment deals using these channels, they do have a brick and mortar presence and will provide you with documents, which scammers won’t.
6. When you win a raffle that you don’t remember joining.

If you get a call that you won a grand vacation or thousands of pesos in a raffle that you can’t quite remember, don’t rejoice. You are most likely dealing with a scammer who will offer a complex deal and will ask you to pay money in order to claim your prize.
7. When the organization offering the scheme lacks credentials.

Whenever you get an investment deal that you find interesting, check out the organization behind it. All it takes is a quick internet search to know if the organization is recognized by authorities to offer deals such as the one being offered to you. If the name does not come up on Google, then you know it doesn’t exist. But even if it does, do check out the contents of its website, its numbers, and its social media presence to know more about it.

8. When you are asked to respond quickly.

Scammers always prey on your emotions and greed, and would ask you to sign up or send money immediately to be able to avail yourself of the promised investment returns. Legitimate organizations would not rush you into making a financial decision – in fact, they would urge you to closely study any planned investment to make sure it is aligned with your needs. Anyone rushing you is simply in a rush to make money off you.

At the end of the day, trust your instincts. Sometimes, even if all the papers and the facts look good, you still feel that something is off. If you have the slightest doubt, then go with your instincts. Most of the time, your gut feel is right.

Grow Your Money is an editorial partnership between and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.

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