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Sunday, October 23, 2011

 

A MEMBER of the House of Representatives has urged the Bangko Sentral ng Pilipinas (BSP) to put an end to the double-your-money, five-year term deposit products being offered by a number of lenders, mostly rural banks.

 

“These double-your-money offerings, which supposedly guarantee a net interest rate of 15 percent per annum, compounded yearly, clearly constitute unsafe and unsound banking practice,” said Rep. Arnel Ty, of the sectoral party LPG Marketers’ Association (LPG-MA).

 

“The promised effective yield is definitely excessive – at three times the average five percent interest rate being offered by reputable banks for five-year deposit placements,” said Ty, a member of the House committee on banks and financial intermediaries.

 

He said many of the rural banks that recently collapsed were found tendering the double-your-money scheme.

 

“These now failed banks were likely already having serious liquidity problems that drove them to offer such sky-high deposit interest rates. Unfortunately, the extremely high-yielding deposits also pushed them into riskier lending activities that broke the bank,” Ty said.

 

Ty also urged the state-run Philippine Deposit Insurance Corp. (PDIC) to take forceful legal action against the officers of bankrupted lenders found to have committed fraud or violated the country’s banking laws.

 

[more at the link]

 

http://www.sunstar.c...y-scheme-186664

Edited by Terp
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well i guess that means it's back to folding my money in half and sticking it back in my pocket to double it

Is it just me or does any body else have a problem with how the returns are generated in the first place. Put aside the legitimacy of claims issue, i am baulking at the morality 15% PA claims being m

The secret Admin police seldom tell us what the members did to get banned but it always amounts to breaking rules. Reading the rules is always a good idea but just use your common sense when you post

Terp;

 

Do you know if this same scheme was used by the LBC bank? I am asking because I remember that they were all over the news for almost a week and a lot of people lost their savings with them.

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Julian C Thong

They are called Ponzi schemes I believe.

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For Real

Sunday, October 23, 2011

A MEMBER of the House of Representatives has urged the Bangko Sentral ng Pilipinas (BSP) to put an end to the double-your-money, five-year term deposit products being offered by a number of lenders, mostly rural banks.

“These double-your-money offerings, which supposedly guarantee a net interest rate of 15 percent per annum, compounded yearly, clearly constitute unsafe and unsound banking practice,” said Rep. Arnel Ty, of the sectoral party LPG Marketers’ Association (LPG-MA).

“The promised effective yield is definitely excessive – at three times the average five percent interest rate being offered by reputable banks for five-year deposit placements,” said Ty, a member of the House committee on banks and financial intermediaries.

He said many of the rural banks that recently collapsed were found tendering the double-your-money scheme.

“These now failed banks were likely already having serious liquidity problems that drove them to offer such sky-high deposit interest rates. Unfortunately, the extremely high-yielding deposits also pushed them into riskier lending activities that broke the bank,” Ty said.

Ty also urged the state-run Philippine Deposit Insurance Corp. (PDIC) to take forceful legal action against the officers of bankrupted lenders found to have committed fraud or violated the country’s banking laws.

[more at the link]

http://www.sunstar.c...y-scheme-186664

Is it just me or does any body else have a problem with how the returns are generated in the first place. Put aside the legitimacy of claims issue, i am baulking at the morality 15% PA claims being made on the sweat of the downtrodden Palm Oil, Sugar Cane & Livestock farmers...or is there another way the return is being generated? Am i just weird?

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smokey

Is it just me or does any body else have a problem with how the returns are generated in the first place. Put aside the legitimacy of claims issue, i am baulking at the morality 15% PA claims being made on the sweat of the downtrodden Palm Oil, Sugar Cane & Livestock farmers...or is there another way the return is being generated? Am i just weird?

 

 

 

 

i know of two legacy guys who have still not been paid one of them had over the amount covered by 180.000p how about double your money every 3 days you give it to me and i bet it on the line in vegas and if WE win great and if not ... oh well

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They are called Ponzi schemes I believe.

 

That depends.

 

There are some excellent schemes that can make massive interest.

Most can also lose massive amounts too.

A few, a very few, cant lose the capital.

 

However, such schemes are not for "widows and orphans", but for experienced investors. Eveyone else should play safe and look at what can go wrong, rather than concentrate on how good things mght turn out to be.

 

(Thiis applies in the West, as well as in less sophisticated markets.)

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broden

well i guess that means it's back to folding my money in half and sticking it back in my pocket to double it

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Do you know if this same scheme was used by the LBC bank?

 

Don't know.

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"That depends.

 

There are some excellent schemes that can make massive interest"

 

 

Care to share?

 

 

I spent my time designing,constructing and retailing such products, retired at 42. never ever offered anything like the returns that are touted now, one reason they succeeded and did not fail.

 

 

Very difficult to construct if Bond market is offering too high returns on dated stocks, it is going to go junk big time.

 

I would certainly like to get my hands on the detailed prospectus of any NON Filipino scheme that is regarded as credible so I can shake it down in detail.

 

 

I remember in the early 90's when I was told that I should be buying in Bonds from Mexico at 18% plus when markets where having problems with AAA bonds yielding 7.5% I just smiled. As it happens they were correct, I did miss a trick as did not realize the USA government deemed Mexico as too big to fail and bailed them out, now that is what I call a real guarantor even if it was not official.

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mikejwoodnz

. . . . As it happens they were correct, I did miss a trick as did not realize the USA government deemed Mexico as too big to fail and bailed them out, now that is what I call a real guarantor even if it was not official.

 

Spooks you may have inadvertently uncovered a possible hidden aspect there - consider this scenario - Tongs - Chinese Banks - bond investments - Tongs - Chinese Insurance Companies - payouts - Tongs - the rich get richer - sound familiar ? :animal0019:

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mikejwoodnz

Trust me!! nothing inadvertent there :animal0019:

 

yep - if it ain't our business it ain't our business :angel:

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David_LivinginTalisay

I am not personally aware of ANY Bank (and this includes Rural Banks, Thrift Banks) that are offering 15%pa, compounded yearly.

 

I would also not place any Deposit in any Bank, that was offering 15%pa, compounded yearly.

 

Why, because you don't get your Interest until the end of the Term, along with the return of your Deposit.

BUT what if that particular Bank then gets into trouble, like LBC recently and the Monetary Board declare it CLOSED.

 

Sure your Deposits are insured by PDIC, now up to Php500,000.00 per Bank, per Depositor. Joint Accounts still carry separate PDIC Cover so you can also have your Sum of Joint Account Shares not exceeding Php500,000.00

 

When PDIC get around to announcing Claims Acceptance, then Process such Claims (without losing the Clain Forms) you will/should get your Insured Deposit back, but that is all? I am sure the PDIC will say " Interest was to be paid on Maturity, this was not reached, so you are not entitled.

 

You will be 'gambling', that the Bank does not get closed down, for at least 5 years from your having placed such Deposit!

 

PinoyMoneyTalk Forum, is good for learning of High Interest Peso Time Deposits and Special Deposit Accounts and nobody there is talking 15% Interest.

 

8%pa is the highest that I read about.

 

I was offered 8%pa on a 1 Year peso Time Deposit with 'Green Bank'. but as that is subject to 20% Withholding Tax, one only get 6.4%pa Nett. NB: they no longer offer 8%pa incidentally, it is lower than that now.

 

There are some Banks offering 5 Year term Peso Accounts with Interest paid Montly, Quarterly, Annually, or on Maturity. It was NOT offering anything like 15%pa however, Being a 5 Year term, there would be no Witholding Tax deducted, as exempt however.

 

“These double-your-money offerings, which supposedly guarantee a net interest rate of 15 percent per annum, compounded yearly, clearly constitute unsafe and unsound banking practice,” said Rep. Arnel Ty, of the sectoral party LPG Marketers’ Association (LPG-MA).

 

I am not up to date with BSP and PDIC rules, but last I did read about was a guideline that any Bank offering excessive Interest Rates (which they defined to be 50% higher than the normal Interest Rate offered by other banks) would be considered to potentially be operating unsafe and unsound banking practice. The PDIC would be contacting the Bnk in the 1st Instance, possibly then conducting an Audit, and then possibly sending the Bank a WARNING asking that the drop that Product with such Interest Rate so no proof has been provided that it is sustainable. Only if such Banks IGNORES such Warning, would the PDIC then get a Cease & Desist Order issued. Anyone placing funds into such Product from that point, wont be putting funds into a PDIC covered bank Product?

 

So unless the Bank has had any inquiry into a particular Bank Product, let alone a Warning Notice, I don't think there is too much to worry about

 

I would however contact the BSP and the PDIC Help Desks, asking if they knew of Bank XXXXX offering Bank Deposit of 12%pa (or above), and ask if any such investigation or warning issued to such bank in respect of that particular Bank Product., and request confirmation such Deposit is covered by PDIC Insurance.

 

Such inquiry, might trigger the BSP and/or PDIC to conduct such Investigation however, but that better than waiting 21 months to get your Insured deposit back (with NO interest at all if compounded to maturity, or last Quarter or up to 12 months, depending on the Deposit terms and Interest Payment frequency).

 

I would also spread the Risk of a particular Bank getting Closed down by placing deposit in many different Banks, not in the same Group at all.

 

This is all Academic to me as I don.t have finds to consider placing in Peso Time Deposts currently,

 

Not likely to consider such for some time either, seeing how bloody slowly the wheel of Justice turns, here in the Philippines.

 

27 months since filing the Court Case, and still no proper Court action, where they ask the Accused "What did you do with all the Money, that you conned from the Investors, having enticed them to hand over large sums of money, for inflated ROI".

 

 

The Philippines has a comprehensive banking system encompassing various types of banks, from large universal banks to small rural banks and even non-banks.

 

As at 31 March 2011, there are 19 universal banks, 19 commercial banks, 73 thrift banks, 595 rural banks, 40 credit unions and 15 non-banks with quasi-banking functions, all licensed with the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) under Republic Act No. 8791, also known as the General Banking Act of 2000, share roughly the same powers.

 

Make sure the Bank you DO Deposit with, is one of those listed/licensed with Bangko Sentral ng Pilipinas (Central Bank of the Philippines)

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The safest way to double your money is to fold it and then put it back in your pocket :lol:

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