A high-yield investment program scam is a sophisticated scam that fraudulently promises to invest suspiciously high rates of returns for investment programs.
These scams claim to yield a 100% annual pay to get their victims and use their money to pay off earlier investors. They involve professional fraudsters to convince an investor to fall for their bogus scam.
To familiarize yourself with this topic; it is similar to the Ponzi scheme. The bogus broker is highly greedy, and their plans are compelling.
It is a Ponzi scheme to understand better what an HYIP scam is. The money taken from an investor is not invested, and no returns are guaranteed.
The scammers will use your money to pay investors they scammed way before. With this scam method, the fradulent online broker has no intention of ever giving your money back; in this way, you should be careful about easy earnings.
How To Recognize An HYIP Scam?
High-yield investment program scams yield a too-good-to-be-true return amount. Assets from investors are then used to pay off other investors. This scam may seem like a great deal, but be aware of every step you make.
Additionally, these investors would make no actual investment once the fraud happens. If the worst comes, the investors are left penniless with slight chances of recovering.
Scam Brokers Reviews recently learned and advised looking for several guaranteed returns because it is a warning sign of a scam. The frauds are also secretive; they always claim that these investments are a once-in-a-lifetime opportunity.
The best way to avoid this evil scam is by asking a lot of questions and using common sense; this way, you will be able to spot the opaqueness of the HYIP company when they fail to provide you with enough information needed.
How Do HYIP Scams Work?
Most scams work like this; the fraud claims that they are the sole traders who can do such trades flawlessly, particularly those with high amounts of money without any virtual proof.
In time, as new investors decrease, the money needed to pay the earlier investors also decreases. This situation is when they come crashing down, and all inquiries in the service will be ignored.
Additionally, some investors are very confident about their activities and might ask you to stay silent about HYIP as they are a part of some group.
The perfect example of an HYIP scam is way back in August 2012, the ZeekRewards scam by Paul Burks that was ultimately taken down by the SEC.
ZeekRewards falsely offered 125% returns on shares from an auction website. Burks immediately persuaded investors to invest in this faulty scheme because of the high return.
They are required to pay $10 to $99 monthly, which is about $10,000.
SEC discovered that most of the funds were paid to new investors and that $900 million were scammed by this fraudulent scheme. The owner of ZeekRewards was fined around $244 million, and he will serve 14 years in jail.
What You Can Do To Protect Yourself?
Many options are available for investors to prove they are victims of a scam. The obvious is when the HYIP company does not want to pay back or simply can’t.
Be careful because these frauds are very clever. Some pay back the investors at first to build a proof of legitimacy when they are, in reality, dishonest scam brokers.
Eventually, the next batch of investors loses their money.
When considering recovering lost funds from this scam, it is a hassle without any assistance from professional cybersecurity lawyers.
A disadvantage is that these scammers are good at hiding and require much effort to track down. Just get a good lawyer, and you will have no doubts while your money is being recovered.
If you can’t get your lost assets back, you should report to the Securities Exchange Committee as soon as possible. Try to include every bit of proof you can and request an investigation.
It all depends on whether you want to protect yourself from scams.
Final Thoughts
However, this type of Ponzi scheme had existed since the 20th century, when technology was on the rise and unscrupulous brokers. It was easy for them to trick people who had no idea about anything.
If you are a beginner in online trading and cryptocurrency, think twice about investing money because fraudsters are everywhere, and you never know who is one.
HYIP scams are increasing, and one of the reasons is affiliate marketing. There are many ways to spot Ponzi schemes, and spotting this scam is good enough for you to avoid more significant risks.
Have you ever fallen for an HYIP scam? You should try to get your money back, or if you can’t, your report will assist us in disrupting scammers. Please don’t feel embarrassed about reporting a scam because it can happen to anyone.
