Amid rising household debt and more people seemingly turning to non-traditional ways of saving money, Central Bank Governor Dr Alvin Hilaire is advising citizens to think carefully before putting their money into financial schemes which promise quick turnovers.
Hilaire’s warning came even as the T&T Police Service continued their probes into the raid on the Drug Sou Sou headquarters in La Horquetta last week. Police had reportedly seized some $22 million in a raid on the operations but junior officers at the La Horquetta Police Station reportedly gave the money back to DSS CEO Keron Clarke without the authority to do so.
Speaking after he delivered the current Financial Stability Report yesterday, Hilaire said the Central Bank was unaware that so many people were involved in sou-sou arrangements and what he described as “potentially difficult schemes.”
“The first thing you should ask is, can I afford to lose this money,” Hilaire advised, adding that some people believe they are investing in something which gives them a very high return in a short space of time.
“You have to look at what your situation is. You have to be aware that if it’s a highly profitable investment, then it’s highly risky.
“If it means that next week your children would not have pampers, think again.”
Hilaire said people should also ask themselves how non-traditional financial organisations are making their money.
“Exactly what are they doing to come up with that?
“I think that is relevant because you look at your own circumstances and you say, ‘Well, for me to make this $5,000, how many maxi trips I had to make to scrape together this money? How many stores did I have to paint or clean to make this money?’ Or, ‘How much overtime did I have to clock in to make this money,’” Hilaire noted
Thirdly, he suggested people should also ask themselves if they have any recourse if something goes wrong.
“If something goes wrong can I go to the Central Bank or to the Securities and Exchange Commissioner, or to the Financial Services Ombudsman, which you can do with registered companies,” Hilaire said.
In this vein, he said the Central Bank plans to increase its educational awareness campaigns.
“It does mean that we have to up our game in the area of financial education and I will have to talk to our ombudsman about that,” he added.