Whether you are a newbie or a veteran online investor, you still have risks. Now knowing or admitting there are risks involved in online investing is a major mistake. A mistake that has cost investors tens of thousands of dollars. Fortunately, it is possible to avoid 99.9 percent of scams when investing online. As you should already know, online investment is much riskier than going through a reputable stock exchange. With all the investment opportunities online, you must expect to encounter a high-yield investment scam at some point.
If you are like most investors, your primary goal is to earn the highest yield with minimal risks. Is this even remotely possible? Yes, it is possible, but only if you are aware of the potential investment risks. Learn more by reading the content provided in the article below.
What Is A High Yield, No-Risk Investment?
High-Yield Investment Programs, HYIPs, are exactly as their name entails. They are investments that offer high yields with no risk. Experts describe these investments as “Ponzi schemes,” a fraudulent scheme that utilizes returns from new investors to pay later investors. A Ponzi scheme is a continuous cycle of defrauding investors. Unfortunately, there will come a time when the scam artist can no longer muster up new investors. When the scheme reaches this point, there will be no funds to pay existing investors.
Most high-yield investment scam artists are adamant about getting investors. So much so, they utilize their current investors to ensure there is a continuous flow of new investors. To entice their existing investors to get unknowingly get involved in the scheme, they offer to pay a referral fee (finder’s fee). A referral fee is a reward given to an existing investor in exchange for an investment referral. Depending on the lead fraudster, the referral fee could be 10 percent or higher. So, it is quite an enticement, one that many investors may find difficult to ignore.
Evidence shows a fraudster operating a high-yield investment program guaranteed its investors up to 60 percent in 100 days. This is an extraordinary yield that is rarely or never heard of in the stock market. The same fraudster raked in over $10 million from its investors in less than a year. Unfortunately, the victims lost their investments.
Fraudsters Target Social Media Platforms
It is not unusual for investors to rely on social media platforms to locate new investment opportunities. It is also not unusual for fraudsters to target unsuspecting investors utilizing social media platforms. Once the word gets out that you are looking for new investments, fraudsters will be all over you. Any information spread much quicker online than offline. So, you can become a target in only a few hours of joining an online social media platform geared toward investing.
High-yield investment programs do not have many requirements. And the ones it does have are straightforward and unsophisticated. Most investment fraudsters require an e-currency account for money transfers. If you are asked to open an e-currency account, you should consider this a red flag.