Very thin line between legit term insurance and Ponzi pyramid scheme

 As I was discussing marketing of a product with an entrepreneur he proposed a too good to be true proposition:   pay one time amount of Php x and if something happens, he gets the product and service free.  I objected to this because it becomes an insurance (if registered) or a Ponzi scam:

What I did not like:

1.  There has to be a big universe:  There has to be many buyers(suckers)  The new buyers of the amount should be able to service the needs of those who need to get out because of death.  

2.  Thus is risky:    the chief has to be responsible for cash flow, and losses of the firm.   If the cash flow out and cash flow in stops, the whole thing collapses and is unsustainable

The cash flow becomes long because there is no limit to the amortization.  It is one time payment of premium.   If there is high returns for financial instruments, then the scheme will work,  If there is inflation for the cost of the product or service being offered, and low returns for financial instruments, then there is a negative carry, and the whole financial model collapses.  

Ther risks are:   CDO from Insurance Commission, SEC investigations, and possible charge of estafa.  

It is actually the way scam, Ponzi scams work.  

How a scam destroyed Albania - due to pyramid scam

 Scams results can be catastrophic.  It can destroy an entire country and bring it an upheaval.

This page/site has very low readership, people are not wary of scams

 This post noticed very low, and sometimes 0 views of this site.  This means that very few people are made aware of scams that they are about to encounter, and hence being not forewarned can fall victim to the MO.

I hope many people will  (Or this is part of following trust no one, not even a scam warning site/page)

Be forewarned be armed.

Trust no one.

Only the paranoid survive

Even the govt, the revenue offices are not immune to scams

 This is an example of how foreigners, immigrants can outwit the legitimate host country and defraud the govt of millions.  This is an anecdote about Iris Tech run by Samer Bishay was able to defraud CRA in the amount of $63Milion in an elaborate carousel scheme to be able to collect tax refund.

Our BIR should be congratulated for being able to control VAT refund being claimed by foreign firms

Carousel Scam - Iris Tech

Creativity and growth in number of scams amazing

 I am amazed how people use their brains and ingenuity to the full on how they can fool and scam others.   I thought our purpose in life is to find your gift and use the same to serve others.

Before this post taught in a school and prior to discussing the legit course, this post asks the students in a group to come up with a crime. scam.  It is surprising how students can be so pumped up and creative.  

Prediction of 2024 scams

 I actually experienced the recovery scam.   My house was robbed 3 years backed and then met the new chief of police who happened to be a relative.  He said he had lead on the robber.  But I should get two tickets worth P1,000 each for further follow up... Last time I heard from him

Beware of AI generated products and celebrity scams...

Criminal case app which you click  which later on cleans your account

Phone call block to your bank for verification

(Before when phone lines were scarce, the lineman had scam to pay him 5 number amount to get a line)

Are organizations, both govt and non govt capable of scams?

 If we include unfulfilled promises or claims or visions that were promised, we would say yest:

1.  Churches/sects -  "If you join us, you will have everlasting life, you will be saved."  -  Do we have enough proofs of those who were saved, or those who had everlasting life.

2.  Schools educational institutions -  "When you study, you will be smarter, you will have high paying jobs."  Really?

3.  Social security system -  safety nets for our workers when they retire or are laid off...

4.  Politicians govt -   We will take care of the poor and take care of your needs.  This country will be great again

5.  Product -  this cream will make you white.  This drug will make you live longer.