High yield investment programs: Luring people in
One of the worst aspects of HYIP’s is that many of these funds offer huge commissions to get people to convince friends and family to invest in them. It is perhaps the most odious part of a Ponzi scheme. According to Wikipedia, the online free encyclopaedia, these are all Ponzi schemes.
Referral fees or commissions are the incentive used to attract local promoters or “middlemen” to encourage others to send in their money. Cherry Shares for example offers a whopping 20% commission while Umba Fund, Investment-A and Golden Trust offer up to 10% commissions. Think about it. A second tier of people are given an exceptional incentive to round up more people and convince them to invest in an outright Ponzi scheme.
We know that Ponzi schemes collapse eventually, and that’s when people lose their entire investment. The consequences on those people can be very devastating.
We did a study a number of years ago that looked at the social impact of investment fraud and learned that it affected people’s emotional and physical health, it affected their relationships with their friends and family. People are embarrassed, ashamed and don’t want to talk about it. Frankly, the effect of this type of white-collar crime is as great on a person as it is with violent crime.
Talk to your friends. Tell them to be wary of anyone trying to sell them a fund in this category. Explain to them that these online investment schemes are all over the internet. There are hundred and hundreds of them, promoted through social media. Some translate their information into many languages. All of them offer investors a rate of return so high it could not possibly be earned through legal methods.