High-yield projects always come with the risk of fraud. It’s inevitable. There will always be scams and there will always be real HYIPs. It’s just a matter of differentiating the two.
The fake HYIPs usually present themselves as real and established investment programs. No one would think they are fake because big time investors are often involved in these scams. Big money is involved. It is really hard to differentiate which ones are real and which ones are out to scam.
Ponzi as a fake HYIP
One of these well-known scams is Ponzi. Ponzi is nothing but a classic financial pyramid. Its scheme is to encourage new participants to invest big money. As new members continue to invest, the operations of the pyramid work smoothly. However, when the new members stop investing in projects, the pyramid breaks down. Worse, the founders, who knew all along that this stagnation would come, get lost even before this happens. Worst, they have with them all the money that they have collected out of the investments of new members. They have anticipated for it, since the moment they saw that they are not getting the same regular interests on their accounts.
If you are actually suspicious, it won’t be easy for you to distinguish Ponzi from real HYIP. For one, it operates on an every-day payment. Meaning, you, as a member of Ponzi, can get as high as 40% of the investment each day. Wouldn’t you think where do they get to pay this big for all the members of the group? Next, it works on big partnership payments. They usually claim they are for mutual benefit cooperation but they deceive you by letting you believe they are established and credible.
You also have to be suspicious when they do not provide much information in their amateurish website. They do not invest on this as they do not want to leak information that may arise questions from people. And, they know that they won’t need their website because the pyramid will break down soon.
Another fraud is the so-called «Golden Games». They work just the same as Ponzi except that they are introduced already as financial pyramids.
Golden Games pyramid is all about being wise. Those who agree in these conditions make their way to gain the more profit that they can get before leaving and abandoning the pyramid. All of the versions of the Golden Games play on this rule. It’s just a matter of who will be on time.