These shady activities, according to the BSP and SEC, include schemes involving “foreign currency trading” transactions.
“Any solicitation to engage in foreign currency trading and to commit funds for this purpose should be considered with extreme care and caution,” the government agencies said in an advisory.
The advisory listed the following precautions that an interested investor should consider before placing his or her funds with any foreign currency trading company:
* Stay away from opportunities that sound too good to be true. Get-rich-quick schemes tend to be fraudulent.
* Avoid any company that guarantees large profits or promises little or no financial risk.
– In many cases, claims of large profits or minimal risks tend to be false. Normally, the higher the promised return, the higher the risks involved.
– Be suspicious of companies that downplay risks or state that written disclosure statements are only “routine formalities imposed by the government.”
* Do not trade on margin unless you understand what it means.
– Certain foreign exchange transactions can make you responsible for losses that greatly exceed any amount you deposited.
– Do not trade on margin unless you are also prepared to accept losses that exceed the margin amounts you paid.
– In case of doubt, consult with reputable investment advisers/consultants and/or financial planners.
* Be cautious of sending or transferring cash on the Internet, by mail or otherwise. Be especially alert to the dangers of trading online. While it can be very easy to transfer funds online, it will often be impossible to get refunds.
* Be wary of companies that offer currency trading online but do not provide information about their company (e.g. office address or other information identifying their nationality, contact numbers and other relevant data) on their website. Be aware that if you transfer funds to those foreign/offshore firms, it may be very difficult or impossible to recover your funds.
* Do not deal with individuals or companies who refuse to give you their background.
– Try to conduct a background check of the persons running or promoting the company. Do not rely on the representations or promises of the company’s employees.
– If you are unsure about the legitimacy and authenticity of the individual or company with whom you are dealing, the best thing to do is to avoid transacting and dealing with them.
* Always keep or retain a copy of the contracts/agreements and other document/s or any receipt/s issued by these foreign currency exchange companies.
– This is especially useful in an event involving legal action. A printout of the page of the website alone may not always be acceptable or sufficient as evidence of the transaction.
* Contact the regulatory agencies.
– Please bear in mind that the mere issuance by the SEC of a certificate of incorporation to a corporation does not include a permit or license to engage in activities which require a secondary license.
– Always inquire as to whether or not the company had been authorized or licensed to undertake the abovementioned activities. Verification can be made with the proper government agencies such as the BSP and the SEC.
source: mb.com.ph
