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There Are Signs Of Fake Investments With The Ponzi Scheme

There Are Signs Of Fake Investments With The Ponzi Scheme

A Ponzi scheme is an illegal investment scheme. The first investor is paid a sum of money called “returns” from the money contributed by new investors. Ponzi scheme players usually deceive new investors by promising an investment opportunity that produces a lot of returns with a very low level of risk (risk = opportunity to lose money in investment). Investors can be told to invite a number of new investors before becoming part of the investment. Usually, family and friends are invited to follow the scheme. They give money that they believe will be invested in a company, but in reality, it is used to pay old investors as their ‘return’. This is obviously a fraud, but it’s the sophisticated one. Therefore, you might want to visit investmentfraudlawyers.com so you find out a trustworthy law firm that you can hire if you become a victim of a fake investment.

You must recognize the following danger signs to avoid fake investments with a Ponzi scheme:

Low risk and high return

There are no ‘guaranteed’ investment opportunities. Every investment carries risk and in general, high returns involve high risks as well. If investment returns regularly and with a positive amount, despite overall market conditions, it might be too good to be true. Investment value tends to fluctuate over time, especially with high potential returns.

Ask yourself: Do I understand the risk of investing when compared to the possibility of return.

Recruitment of friends and family.

Victims of a pyramid scheme are usually required to invite others to the scheme. Money from new investors, their friends, and family, is used by the organizers of the scheme to represent the ‘benefits’ of the so-called investment. In the end, the organizer of the pyramid scheme will run away with the money that must be paid.

Ask yourself: Do I understand the risks when inviting friends? Is there a clear explanation about the calculation of returns?

Trouble receiving payment.

Pyramid scheme operators often ask investors to double their investments and promise greater returns. Start to get suspicious if you have difficulty making money or receiving returns on your investment.

Ask yourself: Is there a systematic process of how investors can monetize their investments at any time. Do I know who and where to ask if there are problems with the investment scheme?

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