Flores, Melcyzedeck M.

WATCH, REACT, APPLY Investment

2BSA-6 & Pyramiding Scams

Scams occur constantly and can go unnoticed by us. Without a thorough understanding of what
pyramid schemes are, why they fail, the consequences of their failure, common victims, how to
avoid them, and how to stop them from spreading, it can be difficult to keep an eye out for them.
Dealing with these frauds results in more people being harmed than being assisted. People need
to know more about pyramid scams since they may be readily misrepresented.
Based on the video clips, Scam participation will almost certainly result in financial loss.
According to "Pyramid Schemes," a pyramid scheme is "a get-rich-quick business deception that
typically harms investors in the end." "In order to be viable, pyramid schemes require a steady
stream of new recruits, Due to the debts taken out to pay out the beginning kits required to attract
new members, these programs also have the potential to harm the economy. People can become
impoverished and lose their assets if the plan fails. If individuals start enlisting friends, spouses,
and/or other loved ones in the scam, relationships may also be ruined. Because the relationships
between the members of a pyramid scheme are shattered, divorces and suicides have resulted
from them. Rather of making money by actually providing goods or services, the initial investors
of this unsustainable business model make money by recruiting new customers. The way the
strategy operates is by requesting an upfront contribution from potential investors before
allowing them to participate in the program. The initial investors are repaid with the funds raised
by the new hires. If the new members are successful in signing up other individuals for the
program, they will get payments. Multi-level marketing (MLM), in contrast to other types of
pyramid scams, is a legitimate kind of company operation. It entails enlisting individuals to assist
in marketing a useful item or service. The recruit is not always obliged to bring in new members
because they get money when they sell the goods. Therefore, the primary distinction between
multi-level marketing and other pyramid schemes is that the latter offers a real good or service
while the former does not. However, even in such case, one can come upon an MLM pyramid
scheme. This indicates that the alternative would involve marketing low-value goods or services.
Selling printed goods, such as financial classes, is only one example.
Flores, Melcyzedeck M. WATCH, REACT, APPLY Investment

2BSA-6 & Pyramiding Scams

I'm a victim of an investment scam here in the Philippines. Apparently, I lost a thousand pesos,
and it started this year in the month of April, when I started to invest. The owner owns a number
of food franchises and provides a high monthly return on investment, or what they call "Pay out"
which is 50 percent. The corporation explains that the money we invest, or what they refer to as
"pay in," is used to expand and invest in her businesses. I believe that it is a legitimate
investment because she has many businesses or branches in different places, I signed a contract
that they provided to the investors, and I got my pay out in the month of July with a high interest
rate. Unfortunately, I was drawn to reinvest once more, and as of August, we know that the
company cannot afford to pay out to the investors, and we suspect that it is a pyramiding scheme.
If the pay in is low in demand, the pay out will be low as well. Unfortunately, the CEO
announced that they couldn't afford to give the investor the interest rate due to mismanagement
of funds and promised to return the investor's capital this December. Thousands of investors are
messing around; some are filing lawsuits to get their money back because the owner broke all of
his promises, lied to the investors, and violated the many contracts that both parties signed. In
my experience, it is very important to have knowledge and learn about the investment company
in which we choose to invest because it is hurtful to lose the money that you worked hard for and
to believe that your money can grow more. In life, there is no easy money; you need to work
hard for it. Also, keep in mind that if a company offers an high interest rate that appears to be too
good to be true, you should be suspicious and stop investing.
My law course on this topic has been very beneficial to me because you can learn and be more
aware, particularly of the rules and regulations of the Securities and Exchange Commission and
the Corporation Codes. Guidelines like "What can I do to sue the business owner?" How do I file
a report, and is it sueable? I can be more aware in the future and criticize what I learn on my
course to be more knowledgeable about investing in different companies, and I know that I can
search the list of legitimate and registered investment companies of Security and Exchange
Commission's website online.