Saturday, 6 February 2021

The Voice - Consumer's Voice

Are these scams?

Mr Harriman, how we can we spot scams? My friend invited me to join Solmax saying we can make a lot of money. My other friend says I should join a scheme called PetronPay. Are these legit? 

Many people have asked me about both of these schemes and my answers have always been the same. It doesn't matter what name a scheme uses, if someone invites you to join a money-making scheme there's one simple fact you need to know. Anyone inviting you to join such a scheme wants to make money FROM you, not WITH you. 

I've already done some research on Solmax and it's complicated. The people recruiting others to join Solmax are actually inviting you to join a scheme called Igniter Pay, which they claim is an "internal project" of a company called Igniter 100 which then trades as YouRemit which is setting up as a money transfer service. They say that Igniter will be listing on the London Stock Exchange later on 2021 but there's no real evidence this is true.

While recruiting people they make claims such as "In Solmax you invest £100 Today … which can provide you with about £2000 next year same time" and that "Over 119.9 million people are into Solmax". They also claim that you earn a "direct bonus" of 10% of any investment made by people you recruit. So what's the truth?

It's a scam.

Like all such scams, the people running it will make lots of money from the people they recruit. Those recruits will make the organisers rich until they're caught and prosecuted.

PetronPay is very similar. It's another scheme that promises enormous returns that are completely unbelievable. For instance they claim that you can earn 2.5% return every day. Let's do the maths. If you "invested" P1,000 on 1st January this year and earned 2.5% interest daily and reinvested that each day, by 1st January 2022 you would have a balance of P8,207,500. Do you really think this is likely?

Like Solmax, PetronPay is a scam and is therefore illegal. Anyone promoting it, or even joining it, can face a fine of up to P100,000, five years in prison or both. Please don't waste your time, money, energy, relationships and freedom on these scams.

I'm paying twice!

At the end of November I got a loan with an agreement that they will pay off a loan from my previous lender. Now both lenders are deducting money from me because the first lender says they haven't received anything from the second. Its now 2 months and both offices are saying they can't help me. I'm now in financial problems because of that. Please help me sir.

I'm very happy to speak to both lenders to find out what went wrong and to encourage then to fix their mix-up. However, I think there's a more important issue here. If you are borrowing money from one lender to pay off a loan from an earlier lender then I'm scared that you might be in a spiral of debt.

When faced with debt many people think the solution is to borrow even more money to pay off earlier debts. In my experience that's a sign that their debt might be out of control. In these cases, it's time to seek some professional advice. I can put in you in touch with ethical debt counsellors who can help you to take a hard look at what you owe, your income and help you develop a plan to rationalise what you owe.

I know it's easy to say, but debt can be a crippling burden. Of course, there are some types of debt that are reasonable. Very few of us have enough money to buy a house for cash and that's a situation when borrowing money from a bank is a reasonable thing to do. Also, in most circumstances a property will increase in value during the term of the loan so it probably makes sense. However, you should ALWAYS be careful when borrowing money to buy something that will lose value, such as a vehicle.

The lesson is simple. While debt can sometimes be a sensible thing, it's something we must approach with great caution and only after we've sought advice from experts. Remember that lenders don't lend money because they're kind and generous people, they do it to make money from the people who borrow from them. It's their business to make money from us. Be careful.

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