The trap behind easy money schemes
THE world saw a growing need for internet dependencies in the COVID-19 era, spurting the introduction of a more modern vocabulary amongst its users. Words such as sheesh, uwu, and the like have become new additions to people’s word banks as the continuous isolation from a physically social world rage on during the pandemic. But as our ways to socialize grew beyond the barriers of physical and lingual connections, so did the evil that came as its caveat. Scheming and scamming have become part of the society and seemingly grows with it. As evident with the rise in vocabulary these schemers use, words such as payaman, power, ez money, and the like entered the new normal as well.
Easy money, as the term suggests, is money obtained for little work, often through dubious means. There were a lot of schemes involving easy money that escalated during the pandemic and which were offered on social media in the face of too-good-to-be-true returns. These mostly attract freelancers and people with little knowledge or who are considered inept when it comes to making sound investment decisions.
The Ponzi scheme, coined after a swindler named Charles Ponzi, is one of such “easy money” scams offered online. This scheme promises high returns with little to no risk and consistent returns in the future. Little do the investors know, the returns they are receiving are just from the funds contributed by the new investors. Ponzi scheme administrators attract investors by advising them to invest their funds in opportunities claimed to generate high returns and offer latest innovations and products to lessen investors’ skepticism in their investments.
According to an article of the Philippine Daily Inquirer, dated October 13, 2021, Davao and Bohol investors lose P2 billion in Repa Paluwagan scams, or informal lending systems that only list members verbally, with them agreeing to theprocess despite having no legal contract. The Securities and Exchange Commission (SEC) had issued an advisory on October 12, 2021, identifying the operations in Davao, Bukidnon, Bohol and Cebu of the Repa as a Ponzi scheme perpetrated by entities that lack juridical personality and registration of their securities with the Commission, making the activities of these entities illegal, fraudulent, and injurious to the investing public.
This scheme works through a handler that sells or “benta” slots from a Paluwagan. For example, a slot is sold to an interested person who provides his or her P20,000 as capital and is promised that it will grow to P25,000 by a specified date. The particular excuse is that these slots are from members who could not wait for the date to get their return so those members will sell their share of the paluwagan at a lower price. Like any other Ponzi schemes, these result to a timely pay-out to make it appear as a legitimate investment with the newest invested amounts used to pay maturing transactions.