A public alert from the Philippines SEC recently urged individuals and businesses to exercise caution with their financial accounts. This advisory specifically highlights the risks associated with “money muling” and advance fee loan scams.
Individuals or entities use personal bank accounts, e-wallets, or other online financial platforms for money muling. Examples include services such as GCash or Maya.
Criminal organisations often exploit these accounts to process funds derived from illicit activities, effectively laundering money obtained through various scams. This can include proceeds from advance fee loan scams, Ponzi schemes, illegal investment schemes, and other forms of financial fraud.
Those found to be involved in money muling will face significant legal penalties under the Anti-Financial Account Scamming Act. These penalties include imprisonment and substantial fines.
Financial institutions, including major e-wallet providers, are actively working to combat this issue. GCash, for instance, has systems in place to detect and restrict accounts suspected of money mule activities. The company has also reported collaborating with law enforcement agencies to apprehend those facilitating such misuse.
The SEC also reiterated warnings about advance fee loan scams. In these schemes, scammers mislead victims into paying an upfront fee, ostensibly for processing or releasing a loan. Scammers often promise to reimburse this payment as part of the loan amount.
However, once victims pay the fee, perpetrators never disburse the loan and seek to extract more funds from them with invented
The SEC explicitly states that legitimate lending and financing companies registered with them do not require advance fees or payments for loan approval or release. Instead, they typically deduct any legitimate fees directly from the disbursed loan amount.
The public should be highly suspicious of any individual or group claiming to represent a registered lending or financing company that demands upfront cash payments for loan services.
Report such demands immediately to the relevant authorities, including the Philippine National Police, the National Bureau of Investigation, or the SEC.
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