Such fraudulent schemes as financial pyramids have long been known, but people still continue to participate in them and fall under the influence of scammers. This scheme works because everyone hopes to earn a decent amount without effort. To participate in a financial pyramid, it is enough to deposit and wait for the dividend payout.
Financial Pyramids
The financial pyramid was invented at the beginning of the 20th century in America.
Its principle is to invite investors to invest in a fabricated idea and promise income from profit. But since the idea is fake, the profit is due to constantly attracted investors, the income of the previous ones is paid off at the expense of the newcomers who make their contribution.
Only its founders, who are scammers, win, and having collected money from investors, they steal it and disappear, leaving all depositors without money.
Fake Investment Funds
Fraudsters always come up with various investment schemes, with fake charitable funds. They prepare for this thoroughly. To attract more investors, they take the most relevant topics:
- they can organize a fund to raise funds for the construction of houses for large families;
- collect aid for a sick child;
- protect nature, care for endangered animals;
By presenting the project, fraudsters lure investors and collect funds into the account of a fake company, which is difficult to trace. Having collected the necessary funds, they do not implement the invented project but simply steal the money and close the fund.
Fraudulent Investments
An excellent income for scammers has become such a type of fraud as investments in housing construction. Many want to get new housing built according to their desires and equipped according to their preferences. For this, they prefer to participate in housing construction.
Fraudsters present themselves as construction companies with modern projects, for the implementation of which investors are needed, who will become the owners of the housing. Swindlers present projects:
- apartment buildings;
- cottage settlements;
- private hostels;
- even hotels.
This is the collection of money with the provision of fake company documents and fake construction presentations.
Deception with Profitable Investments
Swindlers use the developments of banks, creating fake profiles. They also use the names of well-known financial experts, sending appeals on their behalf. The quality of the video is at a good level, it is not always possible to see any mistakes or negligence.
Fraudsters lure onto stock websites by offering a higher percentage of profitability than in regular banks. There is a high risk of losing investments. Fraudsters offer to register on the site and replenish the account, allegedly for investment and earnings. In reality, the electronic wallet or bank card of the fraudster is replenished.
Passive Income Frauds
Fraudsters count on the victim's greed and offer him high returns from investments, it will be passive, nothing will be required to do. It is enough to entrust your funds to their company, which is not real.
The peculiarity of the scam is that fraudsters guarantee a high degree of income with small investments. They will definitely tell you about having insider information, about where it is best to invest money and offer to use their services, as they know unique strategies.
Fraudulent Investment Schemes
- Participating in investment schemes, the victim initially does not assume that they are part of a scam, so by making deposits on cryptocurrency exchanges, investors become victims of deception:
- they will provide fake reports with high income;
- possibly at the first stage they will pay a small amount to extract even more money from the victim;
- when the victim agrees to invest in the project, they increase the amount of the deposit;
- the fraudster may stop working with the investor or continue to lure them into larger amounts by providing fake reports;
- they may delay dividend payments;
- advise to pay various taxes to withdraw or cover commission costs.
Signs of a Financial Pyramid
As the financial pyramid is a well-known method of fraud, there are several signs by which it can be recognized:
- income from deposits of newly attracted investors;
- lack of the firm's own capital;
- lack of a clear definition of the type of activity of the firm;
- lack of a license allowing financial activity in the financial market;
- lack of information in banking registers and documents.
How to Distinguish a Pyramid from a Real Fund
When involving in a pyramid, fraudsters guarantee high income, while real funds do not guarantee any profit. They also have special licenses to operate in the financial market. When making a deal, an employee of a real financial fund will definitely offer to sign a contract. And fraudsters do not bother with this. Also, real companies care about their image, they definitely create a website on the internet with all the information about the company, where the number of employees, the names of the founders or directors are indicated. The policy of such companies is characterized by the fact that their information is transparent and nothing is hidden from the client.