Ponzi Scam | What is a Scam or a Ponzi Scheme?

Ponzi Scam | What is a Scam or a Ponzi Scheme?
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Read this Ponzi Scam article and discover what is a Scam or a Ponzi Scheme? and how to avoid such online danger in order to safeguard your investment.

Ponzi Scam

Ponzi Scam

Ponzi Scam

Beware, Ponzi Scam is a big issue and the scammers are using convincing techniques to appear as genuine in their tricks to scam investors out of millions of dollars every day. Here, we will highlight some of the major problems faced by investor in this online space. Furthermore, we will offer advice and tips on how to identify and avoid Ponzi Schemes and Scams.

What is a Scam or a Ponzi Scheme?

If you are interested in the investment or finance sector, then you must have surely heard about the term ‘Ponzi Scheme’. So, what is this Ponzi scheme or Ponzi Program. If you want to find out, then this article is just for you.

What is Ponzi Scheme?

Have you ever heard of a financial investment package which looks too good to be true? Have you ever come across an offer which promises you to double your money in the quickest possible time? Then my friend, you have already met a Ponzi Scheme. Ponzi is basically a fraud scheme which promises higher returns with lower risks, funds and management. Ponzi schemes offer return so big which is considerable higher than what the conventional banks and institutes offer. It basically takes money from the newer investors and pays it back to the older investors to create an illusion of profit. This lure in more new investors. After a few years when there are too much new investors, the owners of the company disappears without a trace leaving many investors without their investment. It’s the relatively newer investors who suffer the loss.

The Origin of the Name

Ponzi scheme was named after an Italian con-artist Charles Ponzi. He was the first to orchestrate such a fraud in 1919. He was the mastermind behind the postal service scam. He became so notorious with this scam that any scam which resembles this plan get named a Ponzi Scheme. He became famous but through the wrong way. There were many movies, books and documentary made to depict his story.

What are the tell-tale sign of a Ponzi Scheme?

Some say that today’s world is run by the fraudsters. Fraudsters are abundant specially in the investment and finance sector. Fraudsters have found many new ways to deceive new investors. Sometimes it becomes really hard to pick the good from the bad ones. But you can easily find a Ponzi scheme if you look for these signs. Most of the scams and Ponzi schemes have some distinctive characteristics and they are pretty much predictable. The signs are:

  • Offering an unusually higher rate of return which is higher than all other legal institutions.
  • Their brochures and websites try to hide origin and registration information.
  • Their main focus is on attracting new investors. They lure in new investors by offering them more bonus than the existing investors.
  • Most of them will come with money back guarantees.

Their websites are really flashy and filled with all positive reviews. I mean you won’t find even one bad review and most of the reviewer will be shouting about how it changed their lives.

How to stay away from Scammers ?

The offers these Ponzi schemes make is sometimes very hard to refuse. They mainly target people who are struggling to make ample amount of money. But if you stay sharp and alert you can avoid Ponzi schemes. All you need to do is do some research before investing in a scheme and always ask for expert advice in person or through internet forums.

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