Pinoy Entrepreneurs Beware! Scams and Cons
24 June 2008
One very important instinct every business person should develop is how to sniff out the bad eggs. There are a lot of swindlers with various type of modus operandi to dupe you of your hard earned money. More so if you are an entrepreneur since they know that we entrepreneurs live by one creed (or should I say greed)… "Never turn away a customer". They take advantage of this and wave a bait in front of you like a huge order or something. There are huge scammers and mini-scammers. Anyway, here are some experiences and I would like to share it with you lest you encounter the same group of swindlers.
1. The PURCHASE ORDER… the swindler will usually does this on a Saturday. He will bring a purchase order from a known company and he even has a check with the company's name on it. His truck will also bear the company's name. Then he will go to your place to pick up the items and pay with this check. So here's the problem, there's no way to verify the check since banks are closed on Saturdays and you cannot call the company since it is closed on Saturdays. In this case, do not push through with the sale. My friend experienced this and it was the swindler's bad luck that the company he used was a good friend of my friend. So he just told the guy that he has no stock and to come back on Monday. Guess what? the guy never came back.
2. The NOT-YET-CLEARED check… the swindler will make a purchase and pay you with a check, the check is usually dated on a Thursday. So you deposit the check and come Friday, he will go to your site and ask to pick up the purchased items. He will say that it's rushed and he cannot wait to get the items. If you reason with him that the check has not cleared yet, he asks you to call the bank to verify the check. Sometimes, the bank is kind enough to entertain your call but more often than not, they will shun you away. So he offers another telephone no. and asks you to look for this Ms. So and So who is an officer of the bank. The number he gave is someone who is in on the scam. In this case, find someone you trust to verify the check. Find a friend who has accounts with the bank of the issued check or ask your own bank to call the other bank. Also, it is important to ask the issuing bank if there are any canceled accounts, hold checks, stop payment orders from that account number. Sometimes they use stolen checks. The best way is still to wait for the check to clear after three banking days.
3. The FAST P2,000… now this swindler is quite a talker. He makes a lot of noise about being a right hand man of a known company. He will then order some big amount items from you and asks you to deliver it to the pier. So you tell him that you will not deliver unless they pay for it. He offers to deposit the cash online. He asks for your account number and makes a call to his boss to make the online payment. After 30 minutes, he calls the boss and confirms that the deposit had been made. You call the bank and knows that no deposit has been made. So he shifts to another tactic… he asks you to send your guy to accompany him to the pier. Your guy will now wait for your go-signal before loading the goods on the ship. Seems safe since your goods are still in your hands right? But here's the catch, he asks to borrow P2,000 for his expenses and says his boss will deposit it with the payment. I personally experienced this and the guy was very smart. He stayed for almost an hour until he finally gave up. When I checked the phone for the calls made out, I saw that the numbers made were bogus. The cellphone number he gave was also bogus.
4. PAYING WITH MC (Manager's Check). This used to happen a lot during the 80's and 90's. The swindler either alters the manager's check or makes a fake one.
5. FOREIGNERS. For some reason, these foreigners look down on us local Pinoys. They must think that being a first world national makes them a superior race or something. I've had a Korean client who came in and asked about a lot of items. Finally he placed an order and wrote off a check to pay. When I told him that I have to wait for the check to clear, he got pissed and asked me to call the bank. Well, I called and learned that he did have money in the bank but the account was opened just a few days before. So I still insisted to wait for the check to clear. He canceled his order instead. Now, I don't know if that's a swindle or not, but I'd rather be safe than sorry.
6 . LONG TERM SCAM. Now, this takes a lot of guts, resources and most of all planning. The swindler or group of swindlers will engage in a new business venture. A few months after opening, he will have high volume transactions with the manufacturers and pay cash or even pay in advance. After establishing his good credit and liquidity, he starts getting credit lines from his suppliers and the banks. He also becomes a major supplier to other retail establishments by offering below manufacturer's price. But the retail establishments have to pay in advance to him. Especially in times of rising prices, retailers grab the opportunity to have cheaper costs. Then a weekend before he runs off, he makes a lot of purchases and pays with dated checks. Even on the Monday after, he makes more purchases. Come Tuesday, the guy is nowhere to be found. And what happened to his inventory? Gone… only a measly amount of stuff was left. He has sold out his inventory through other "partners-in-crime". In this case, it is also probable that the guy did not plan to do this but was forced to do it due to casino debts or other reasons. But I believe that more often than not that its a long term scam. The latest I heard was about a business establishment in Batangas and the guy's debt was estimated to reach P400 million pesos!!!
Life's a bitch… None of these scammers have been captured or imprisoned. They continue to do their crime by moving to a different province or municipality. Sigh…. To quote Korina Sanchez and Ted Failon's ending "prayer" in their radio program in DZMM every morning, "Lord, Kayo na po ang bahala sa kanila."
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Scams 1-5 are easy to detect and evade. Scam #6 is harder because you have already gained the trust of the person you’re dealing with. Recently, Ive heard of a scammer who is in the construction business do the same. The guy probably already went out of the country (back to China I suppose). And when poor creditor found out, he went to the warehouse with 100 people and 10 trucks to haul inventory. When the gates opened, voila, the place is empty. Looks like a good script for a Hollywood movie. Talk about life imitating art huh?