A project in which depositors receive income from the funds of new depositors is called a pyramid scheme and is considered a fraud. As a rule, the bulk of the participants in such projects lose their money, so it is very dangerous to invest in such companies. The main signs for such organizations will help to recognize fraud.
On the Internet, financial pyramids are disguised as various investment projects, deceiving new investors by deception. The number of projects for extorting money from the population on the Internet is increasing every year. For each closed pyramid, two new ones are opened. The organizers of the pyramids receive billions of dollars, and gullible investors lose their money.
The main reason for this proliferation of pyramids is common human greed. The desire to get rich quickly haunts anyone. Therefore, there will always be such projects and companies.
A distinctive feature of the pyramid scheme is the promise of participants to receive high profits. If you are offered an income of 20% per annum and above, you should know that this is a scam. Because a legal way to make a profit of more than 20% is almost impossible.
Many highly profitable projects openly declare that they are a pyramid scheme. Such projects are also called HYIP or just HYIP. As a rule, all HYIP companies have a standard website, which indicates the total number of depositors, the number of new members, the number of deposits, the amount of payments and other data. If you go to such a site and see such information, be sure this is a hype.
The method of depositing money can serve as proof of a pyramid scheme. Various electronic wallets and payment systems are used to transfer money. To make a deposit, you are offered to transfer money from one wallet to another. That is, you need to manually transfer money to the specified wallet. At the same time, the data about whose wallet it is and to whom you are making the transfer is unknown. This method of depositing money confirms that this is a HYIP project.
However, not all organizations want to admit that they are swindlers. As a rule, it is impossible to attract a lot of participants to a dubious company in an honest way, so the income will be very low. Therefore, such structures call themselves a management company or an investment project. Receiving high profits is justified by investing money in securities and playing on the stock or foreign exchange market. In reality, this is only a cover and no work is being done on the exchange.
Indeed, investing money in stocks or bonds, as well as playing on the stock exchange, can bring high profits. However, even such an investment cannot be reliable. The likelihood of losing your capital is much higher than the chance of making a profit. If you are offered a stable and high income, you need to doubt.
There is no need to rush before participating in such projects. The company must be well-known. All information about the organizers of the project, documents confirming their activities must be publicly available and can be checked. If you are told that a company does not need a license to operate, do not waste your time on this company.
A pyramid is a company in which, upon joining, it is necessary to deposit a certain amount of money. Participants will receive income when they can recruit new customers, and they also make their contribution. New entrants also need to attract new victims. The more people participate in the pyramid, the higher the income of the first entrants will be. As long as there is an influx of customers, the pyramid exists and everyone gets their share. When a project closes, the most recent contributors get nothing and lose their money.
You can apply the pyramid pattern in any field of activity. Because the pyramid is not only about getting high interest on the deposit. Other methods can be used to deceive ordinary citizens. With the development of Internet technologies, many online stores have appeared. You can become a victim of scammers when buying goods over the Internet.
The deception scheme is very simple. They start selling the product at a big discount. Mass advertising is carried out. The first buyers really get a quality product at a low price. And the company can operate at a loss for some time. Satisfied buyers create ads. New customers are attracted, who cancel the discounts of previous customers. At some point, the online store simply stops sending goods to customers and closes. Clients run out of money.
In order not to fall into such a trap, pay attention to the payment method for your purchase. If the money needs to be paid in advance, and the price is 30% lower than the average cost on the Internet, you need to be wary. What is the guarantee that you will receive the product and it will be of proper quality. Online purchases need to be paid only after receiving the order.
The pyramid principle can also be used by other organizations, such as travel agencies. To attract new customers, with high competition, agencies make discounts. Losses received on discounts are reimbursed at the expense of the funds of future vacationers and loans from the bank. For a while, this scheme has been working and the company is flourishing. As soon as the flow of tourists decreases, the agency has nothing to book hotels and pay for tickets. Debt gradually grows, and in the end the company goes broke.
Sooner or later, the number of new depositors in any pyramid begins to decrease and there is nothing to make payments with. The pyramid collapses, the project is closed, depositors are left without money, and satisfied managers are calculating profits. Therefore, never invest the last and borrowed money in such projects. If you decide to participate anyway, then the amount of money should be such that you do not mind losing.
