In recent years, stock market has been showing signs of gaining it’s lost track. However, for many investors, this recovery isn’t sufficient. They are still searching for quicker ways to yield higher profits and bolster their investment portfolios.
But the problems lies in the fact that most high yield investment programs (HYIPs), almost 90% of them, are downright frauds. Most critics think HYIPs are similar to Ponzi schemes, crammed with ‘scam’ artists only after investors hard-earned money.
In addition to newbies, investment fraudsters are also targeting senior investors. In recent years, seniors are complaining their retirement accounts and earnings are slowly dwindling.
Among all these scams making the rounds later in the Internet, every investors major concern is the same – how to spot scam artists before making an online investment.
Here are top 5 scam investment programs that you should be aware of (ranked in terms of its seriousness and prevalence):
- #1: Ponzi Schemes
Ponzi scheme was named after Charles Ponzi, a fraudster from the early 1920s who swindled over $10 million dollar from investors by promising over 40 percent profit share. Countless other scam artists has been copying his formula by promising higher returns to attract investors and use their money to pay their current investors.
Whenever they’re inquired for the failure of their system, Ponzi ,,scammers,, will often blame the government.
- #2: Promissory Notes
Insurance agents sell these short-term debt instruments to investors promising higher return, up-to 15% monthly profit share, with little or no risked involved. These companies are little-known and most likely non-existent.
- #3: Affinity Fraud
Scammers are also taking a lot of advantage from people who have tendency to trust others who share similar interest. These scam artists build trust and then steal their life long savings without their victim’s knowing.
These swindling programs may including handing out ‘gifts’ at churches and tempting people to invest in scam foreign exchange trades.
- #4: Unlicensed Individuals
Scam artists also tempt independent insurance agents to sell investments to people who do not know a lot about them. For example, the person in charge of this scam ask ‘unlicensed’ agents to convince newbie investors by promising higher returns with little or no risk at all.
If you (an investor) are approached by any independent agent, you must do your due diligence to check their credibility first. Call state securities and ask whether the agent is licensed. Next, ask whether the company offering investment plan is registered. If the answer is ‘yes,’ do NOT rush investing in the program though. Review the product by remaining skeptic as you’d do for any other investment types.
- #5: Internet Fraud
Internet fraud is a BOOMING business for many ‘scam’ artists. In November, last year, local, state, federal and foreign law-enforcement officers conducted an Operation Cyber Sweep that made 125 arrests, identified more than 125,000 victims who were losing an estimated $100 million.
Internet is the best – fast and cheap – medium for these ‘scam’ artists to reach out to millions of potential victims.
Many officials against cyber theft are warning potential investors to be wary of infamous Nigerian 419 scam, saying that they must ignore emails and offers from people in need of help to deposit money in overseas bank accounts. If you get these type of e- mail, simply hit the ‘delete’ button. Stop being conned.
Read our blog for learn more HYIP tips and tricks.
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