Are You Being Scammed? Here’s How To Tell.


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Ever been offered the chance to make easy money by barely working from the comfort of your own home? In the age of the internet and social media, you could be fending off offers like these from all sides. Sometimes, you might even be tempted, because the promised returns are too great. But what if it’s a scam? How do you know?

It’s getting harder and harder to tell if something’s a scam or not, because scammers are getting trickier, like in the latest Emgoldex scam to hit the Philippines. So you have to be smart, because it’s up to you to ferret out the scams from the legitimate opportunities. Here’s how to tell if something is a scam:

The company is not registered with the SEC or DTI.

A quick way to tell if an MLM (multi-level marketing) scheme legit or not is simply by going to and checking if the company you’re wondering about is registered there. If they’re not registered, then they’re not allowed to take money for “investments”. Any business involved in selling or investing anything has to be registered with the Securities Exchange Commission (SEC) or Department of Trade and Industry (DTI). And in the case of Emgoldex, because they’re supposedly dealing with gold, they had to be registered with the Bangko Sentral ng Pilipinas (BSP).

Emgoldex fulfils none of these criteria. According to the SEC memo about Emgoldex, “Emgoldex Philippines is not a registered corporation or partnership. Likewise, such entity is not authorised to solicit [investments from] the public … as required under Section 8.1 of the Securities Regulation Code.” So they have no right to take your money as investments.

Before giving your money to one of these schemes, just look up the company name on If they’re not there, don’t give them your money, and warn your friends and family against the scam.

There’s a joining fee, or you’re required to buy a lot of inventory.


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One of the first things you should look out for is a joining fee. A lot of scammers will even “guarantee” you a certain amount of income in exchange for an “upfront fee”. But what will happen is that they’ll take your money and you’ll never hear from them again. So if you’re being asked to pay a certain amount upfront, even if it’s just P1,000, and you’re not sure what you’re getting for it in return, keep your money and run fast in the other direction.

Another way the scam can get money from you is by forcing you to buy a lot of inventory or useless products to keep your status in the company. New recruits are often told that they need to buy a lot of the products to join the business. If you do this, you’ll have spent a significant amount of money and stuck with products that you’ll most likely have a hard time selling off while the scammer enjoys your hard-earned money.

There’s no actual product or service for sale.

Do you even know what the MLM is selling? If you can’t name a specific product or service being offered by the MLM, it’s probably a scam.

Let’s take Emgoldex as an example again. What was the product for sale? You’d think it would be gold, but it’s not. “Emgoldex promises to make its investors rich, not because of the gold, but through its commission plan. It offers returns of at least 1,105 percent, fast, easy, and without any risk,” Salve Duplito, host of ANC’s “On The Money,” said on her show.

The main goal of a legitimate MLM scheme is to sell products to people who aren’t already in the program. So find out what you’ll be selling before you give any money, and if the recruiter can’t explain to you what you’ll be selling, it’s a huge red flag.

Pyramid scams hook people by selling them the dreams and making the person they’re talking to feel like they deserve to be rich. Usually, they won’t even mention what product is being sold after their 20 minute presentation.

The focus is on recruiting, not selling.

If you’re promised more money for recruiting others than actually selling any products, you should be wary. This is a major red flag indicating that something is a pyramid scam. “If a program primarily focuses on recruiting others to join the program for a fee, it is likely a pyramid scheme,” advises the United States SEC.

Let’s take Emgoldex again. According to Ethan Vanderbuilt, the internet scam buster, “Investors have no incentive to sell Emgoldex’s purported product, gold bars. Instead, investor efforts are focused on recruitment.” In the US, Emgoldex was holding weekly “training”, not to sell its products, but to train investors on recruiting new investors to the scheme. That’s a classic pyramid scam if we ever saw one.

If the scheme you’re being offered relies mostly on recruiting and not sales of its purported product, then what you’re being sold is a scam. Avoid it at all costs.

It’s just too good to be true.

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Remember the old chestnut: if something’s too good to be true, it probably is. Emgoldex Philippines promised high returns to its “investors”: giving P1,000 would get you P10,000; P35,000 would get you P180,000 to P360,000.

This is a huge red flag. “High returns and fast cash in an MLM program may suggest that commissions are being paid out of money from new recruits rather than revenue generated by product sales,” the US SEC says. In simpler terms, if they’re promising you fast cash, they’re probably getting that cash from new recruits, instead of legitimate profits from product sales. So when defenders of the scam come forward and say they’ve been paid so it must be legit, keep in mind their money most probably came from new recruits to the program who’ve just paid their upfront fee.

When considering MLM schemes, don’t let greed and the promise of easy money lure you. Do diligent research. The US Federal Trade Commission recommends that you ask these questions:

  • What are your annual sales of the product?
  • How much product did you sell to distributors?
  • What percentage of your sales were made to distributors?
  • What were your expenses last year, including money you spent on training and buying products?
  • How much money did you make last year — that is, your income and bonuses, less your expenses?
  • How much time did you spend last year on the business?
  • How long have you been in the business?
  • How many people have you recruited?
  • What percentage of the money you’ve made — income and bonuses less your expenses — came from recruiting other distributors and selling them inventory or other items to get started?

If the company gives you satisfactory answers to these questions, and your research backs them up, then it may be safe to proceed with them, if you want. But if they don’t give you good answers, or you do your research and something smells fishy, then trust your instincts and don’t join the scheme.

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