PERSONAL FINANCE

10 Best Examples of Networking Scam in the Philippines

July 7, 2017

Today we will be talking about the 10 Best Examples of Networking Scam in the Philippines and How To Avoid Them.networking-scam-in-the-philippines

In year 2012-2015, networking multi-level marketing was the business to be. I remember getting invited to attend seminars and meetings at Starbucks, encouraging me to invest and become a distributor.

Socail Media was surrounded by memes and jokes mocking those who are part of the Philippine networking business. Distributors and members on the other hand, fire back with more photos showing off how much they earn with multi-level marketing.

But, not everyone becomes rich in networking. There are many who join, not knowing what they are dealing with.

Networking scams continue to give false hope to the Filipino people year after year after year.

This week, the words networking and scammer were once again flooded on my personal Facebook newsfeed. And it all points out to one person — Xian Gaza, the CEO who bought a billboard slot to ask actress Erich Gonzales for a coffee date.

At first the move was perceived to be a sweet gesture of a bachelor until “former victims” exposed the kind of scammer Gaza was once.

You can read the story here and here.

 

Netizens even pointed how this whole “courtship” move could be another way to lure investors in Gaza’s civet coffee venture, with the business being mentioned by Ogie Diaz, who clarified his connection with Gaza. See the relation between coffee date and civet coffee business?

 

With my interest in the whole Xian Gaza FB-serye, and with Gaza disclosing publicly that he was once a networking scammer, I manage to create a blog post on the best examples of networking scam in the Philippines. 

In this post I intend to educate you on what networking scam is, how it works and how it can be avoided.

A little disclosure though:




  • I am not against networking or multi-level marketing. I do have people within my inner and outer circle who are part of legitimate networking business and I can clearly see the benefits joining made to them.
  • I am also not against Xian Gaza. I adore his bucket list album and seriously he inspired the go-getter in me.
  • This post is again created only to educate, inform and discuss for as a financial advocate, it is my goal to help you earn and use your money in the right way. 

READ: How To Invest for Beginners in the Philippines

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Networking in the Philippines

Networking was once considered as the newest and the fastest way to get rich. It involved three things – invest, sell and recruit.

The Multi-Level Marketing will search for potential investors. Once you agree to join you will be given products at discounted price worth the money you invested. You can now sell the products at its original price to generate income.

Or, you can do the faster route which is recruitment, wherein you invite another person to invest, sell and recruit with you.

Words like downline (people you recruited or people recruited by your recruits) and upline (people who were recruited before you) are often heard in a networking business. Not to mention the famous catchphrase “POWER!!!”.

By 2016, networking in the Philippines died down and Filipinos weren’t that interested anymore. And it all boils down to one reason:

Networking Scams

Scam refers to any fraudulent business or scheme that takes money or other goods from an unsuspecting person. Scam can be of any act from phone call, email, romance to job. As long as it is a created to deceive you and take money from you without anything in return, it is considered as scam.

How Networking Scam in the Philippines Work

Below are your own checklist to know whether a n

1. No products

If the networking company you joined focus more on recruitment rather than products – get out NOW! Businesses exist because of products and services.

The end goal of the MLM Company you joined should be to get customers for the product/service rather than to recruit and build your team.

Sadly common MLM scammer will pitch you profit rather that the products. These sales pitch should be avoided at all times.

2. No Legal and Official Documents to Present




Another red flag when it comes to networking scam in the Philippines is the lack of legal and official documents such as but not limited to:

  • DTI Certificate (for sole proprietorship)
  • SEC Registration (for partner and corporation)
  • Business Permit
  • BIR Certificate of Registration
  •  Official Receipts

The lack of official website, headquarters or office as well as proper email address can also be considered as signs you are part of a scam. Always, always check how legal the business is before you invest.

READ: How To Invest Your 5000pesos

3. Too good to be true

As hard as it can be, when it comes to investment, if it is too good to be true, then most probably it is not true!

From products that have outrageous claims and benefits to return-of-income that are too high and too fast should scare you and not the other way around.

Low-risk but high-return schemes are not the way to success. Most often than not, high-risk investments are the ones that can give you the highest returns.

4. Rampant sales tactics

You should never be pressured to invest in a MLM company. If you are asked to join on the spot saying your entry fee will double if you delay or you will miss out the chance to be part of the pioneering team then you are in the middle of a sales tactic to scam you.

Joining networking companies are not your ticket to get rich fast. Answering your account opening form and investing x,xxx amount will not guarantee an x,xxx,xxx returns right away.

Investment Scam Checklist. Sourch : http://www.sec.gov.ph

How Not To Be Scammed By Networking Scam in the Philippines

The more you know, the better – this is the best investment knowledge I want you to remember. Whatever financial decision you do, big or small, should be studied and decided first and foremost.

Be a vigilant individual/investor.

Here’s how not to be scammed by the scammer:

First, know the company and your recruiter

Be informed and research about the company well. Take your time in asking whether the company has enough papers to function. Check the registration and know how long the company has been in the business, Compare the prices as well as compensation plans of the different networks you know.

Next, learn from the others

Interview people who have been in the business and ask about their experience and stories. Learn how they do networking and if they have no regrets at all in the investment they made. Don’t just interview those who succeeded but also those who quit the business. Evaluate and assess so you will have a better decision.

Lastly, study the products

All Multi-Level Marketing has a product or products they are selling. This what makes them a company in the first place. Study the products that the network is offering. How much is it sold, what’s the market value, can you really sell the product on your own? It the product safe? Does it have demand? 

READ: Cropital, PhilCrowd and FarmOn: Best Alternative Investment in the Philippines

 

10 Best Examples of Networking Scam in the Philippines

Now we’ll move in revealing the list of scammer in the Philippines. These multi-level marketing companies operate in an illegal manner with no registration and no license under Securities and Exchange Commission (SEC). The information written below are based on SEC advisories you can view and further read here: http://www.sec.gov.ph/public-information-2/investors-education-and-information/advisories-and-notices/

1. Emgoldex Philippines

Emgoldex Philippines scams Filipinos by promising huge profit for an investment of 1,000pesos only. The line of business of Emgoldex is buying and selling of investment gold bars of different value. Your gains will range from 5,000pesos – 10,000pesos. If you placed 35,000pesos you will yield 180,000pesos to 360,000pesos.

They even went to an outrageous sales tactic of no-recruitment-needed, no-selling-of-products, but with guaranteed 500% ROI. SEC then issued disclaimers stating Emgoldex Philippines is not a registered corporation or partnership in the Philippines. Thus, Emgoldex Philippines is not licensed or authorized to solicit investments from anyone.

As of today, Emgoldex continues to operates but with a different name, Global InterGold.

2. One Lightning Corporation

One Lightning Corporation invites people to invest in cosmetics and healthcare products with high returns. The compensation plan reveals a shared profit of 70% to its investors. However, the company focus on recruiting new investors/members more. They give referral awards for new recruits and bonuses at every level for three levels of referrals made. A sum of 70million was scammed by One Lightning Corporation and they stopped paying back all of their investors.

As of today, six officials including Ito brothers who play the role of President and Chairman respectively were already in prison.

3. Success200

Success200 operates in different location in the Philippines and even abroad. The scam company engage in investment-taking activities where one person is enticed to invest at least 1,800pesos (low-end) to 36,000pesos (high-end) with a promised return of 10,000pesos for the low-end and 200,000pesos for the high-end. Although Success200 has SEC registration issued to operate as an entity, it doesn’t have license to solicit investments as required under Section 8.1 of the Securities Regulation Code.

As of today, the business website of Success200 is still up. I do want to warn you that taking investment, recruiting members that also has to shell out money are considered red flags for a pyramid scheme.

4. One Team Global Solutions

One Team Global Solutions engage in unauthorized investment business. The corporation implements what it calls as “Personal Matrix” whereby individual buys an account/slot worth 2,500pesos representing a supposed purchase of products with a promise of 12,500pesos return. Member will then recruit two persons as right and left downlines and these downlines will then recruit additional downlines. You will earn commission for successful slot filled via recruitment.

As of today, a One Team Global Solutions Facebook page with 228 likes still exists with the description of “We are new global network marketing company based in the Philippines”.




5. 24k Times Gold International Marketing aka Timesgold

24k Times Gold International Marketing aka Timesgold operates just like Emgoldex. You are enticed to invest a minimum of 10,000pesos that will earn 26% interest after 15 days. As per SEC review, Timesgold is not authorized to solicit investments from the public as it did not secure necessary permits to undertake investment-taking activities.

As of today, 24k Times Gold International Marketing died down already in the networking business.

6. My Science of Success Marketing (SOS)

My Science of Success Marketing is engaged in collecting investments with a minimum amount of 1,610pesos. This minimum investment will then yield an interest of 550pesos within four days. As an investor you will be give products such as glutathione soap and a box of morninga coffee you can distribute to get your capital back and possible return. But later on you will no longer receive products because of the alleged lack of supply. The 4 days guaranteed return of investment will be stretched from 8 to 15 days to no payment at all.

As of today, there exist not only one but three Facebook pages of My Science of Success Marketing. The networking scam operates mainly in Calamba, Laguna and nearby provinces.

7. Just 950

Just 950 operates in another outrageous low-capital, high-return system. For just 950pesos you will get one (1) slot with a promised pay out of 2,300pesos. Soon after SEC issued advisory that Just 950 is not registered as a corporation or as a partnership and have no license to solicit investments to the public.

As of today, Just 950 already died down as a networking scam.

8. Dragon One Network Trends Corporation

Dragon One Network Trends Corporation operates mostly in Davao and other provinces in Mindanao. The scheme is as simple but as scary as it is, investor can choose to investment among packages from 1,800pesos to 360,000pesos. Upon payment of the chosen package, the investor will receive 4 post-dated checks equivalent to 34.7% of the investment which will mature in 15 days. With that compensation plan an investment of 1,800pesos will earn 2,500pesos in 60 days, 5,400pesos will earn 7,500pesos also in 60 days and the maximum investment of 360,000pesos will earn 500,000 ROI in 60 days.

As of today, complaints from investors who wish not to be named are already filed against Dragon One Network Trends Corporation.

9. Bridges Team Effort Network Marketing Corporation

Bridges Team Effort Network Marketing Corporation is a networking scam based in Cebu City. The corporation sell internet based software primarily used for e-mails and on-live video presentations (My Video Talk). These products are sold via network marketing in the Philippines. Individual will buy the product for 13,000pesos and then becomes an automatic investors. As investor you are given additional opportunity to earn for every buyer referred. Bridges Team Effort Network Marketing Corporation does not possess license to offer or sell securities.

As of today, SEC continues to warn the public not to engage in businesses such as Bridges Team Effort Network Marketing Corporation that holds no license to operate as an investment scheme.

10. Monspace Philippines

Monspace Philippines is the newest networking scam. Monspace claims that it has a system wherein investors can invest and become stockholders of its subsidiaries by simply investing an initial capital of amounting to 7,600pesos. Daily income amounting to 5,000pesos and/or monthly income of 150,000pesos is promised to the investors.

Monspace even introduced a compensation plan in its Facebook account involving MSCoins. With the initial capital of 7,600pesos with 800pesos as registration fee and 6,800pesos as initial 500 product points. After a week your MSCoins will be equal to $500 (25,000pesos), after a month it will be $1,000 (50,000pesos), after 3months it will be $10,000 (500,000pesos) and after a year it will be $100,000 (5,000,000pesos).

Monspace Philippines is not registered as a corporation or partnership under SEC. They also don’t have the necessary license to solicit investment, recruit other people to join or offer investment products.

As of today, Monspace Philippines continues to operate. The company even claim that they are not part of investment scheme.

If you were scammed by any of the above and you want to share your investment experience please feel free to use the comment section below. Those who have succeeded in making money may also share their side of the story.

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Difference between Networking Multi-Level Marketing and Pyramiding





By definition, Multi-Level Marketing is a business engaged in distributing products to consumers. Unlike other business ventures, you are partnering with a company that will supply you products you can sell in return. Multi-Level Marketing act as a channel to market real, quality products.

Pyramiding, on the other hand, is a fraud. You are investing in a business disguised as a networking company but with no products, no legal documents and no concrete compensation plan at all. The return of your investment (kung meron man) is purely based on the number of people you recruit.

It is hard to differentiate MLM with Pyramid scam because the later already mastered how to lie to the public. That’s why more and more people up to this day are scammed.

Pyramid scheme exists only for the sole purpose of GETTING YOUR MONEY AND THOSE AROUND YOU!

MLM business ventures who offer or sell investment products and securities need secondary license from Securities and Exchange Commission (SEC) to operate. Failing to do so will consider as a scam already and the firm is held criminally liable.

Final Notes from SavingsPinay

Networking scam in the Philippines is everywhere. Filipinos are victimised and continue to be victims by these scammers. Walang masama sa mag-asam na maging maginhawa ang buhay, just always exercise caution when it comes to investing your money.

Schemes such as low to no capital but high profit are usually red flag of a scam. Transact only on SEC registered networking companies.

Stop investing in what you don’t know. Research a lot and think first before letting go of your hard-earned money.

 

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Have you ever joined a networking/multi-level marketing company? What was your experience? Do you know anyone who has been a victim of networking scam?

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Clariza Glino

Izza of SavingsPinay promotes financial literacy for the young and young at heart by providing insights and tips on budgeting, saving, investing and online entrepreneurship. Aside from this blog she also writes at www.izzaglino.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at izza@savingspinay.ph