“Looking for an investment scheme with fixed return every month, if yes, then here is the best offer for you. Just give me your money and I will give you 7% return every month. Yes, every month! “
That’s quite attractive, isn’t it? Investing in this scheme can make you rich in a short time. You can fulfill all your dreams.
So, how many of you are ready to invest in this scheme?
Almost all of you. Great! Congratulations, by investing in such schemes you kickstart Ponzi Scheme. But the bad news is, that it wouldn’t be you but the company or individual who introduces it become rich.
Disappointed?
But this disappointment is better than sadness and grief you will be in on losing your entire capital. Let’s get into the details to learn how does a Ponzi Scheme work but first understand the meaning of Ponzi Scheme.
What is a Ponzi Scheme?
A Ponzi Scheme is one type of financial fraud where a company or an individual promises high return with a little risk to investors. The Ponzi scammer uses the fund of new clients to provide return to old & existing clients.
With time, when he fails to add new investors he fled away with all your capital.
You can easily relate with one of the Bollywood Movies ‘Phir Hera Pheri‘ and the context ‘21 din me paisa double’‘. All this is something that you will hear from scammers promoting such schemes.
Let’s now learn how it works?
How does a Ponzi Scheme Work in India?
Ponzi scammers generally reach out to people who live in rural areas and have little knowledge of investment regulations or groups of retired people who have enough money to invest.
Now, they make themselves appear as the part of successful business that deals with investment. They ATTRACT PEOPLE by showing high returns and low risk on investment.
They use every tactic to make people fall for their investment scam. Once they gain success in convincing people they start getting huge capital.
From here they move towards the next step to GAIN CREDIBILITY.
Now how do they do so?
By looking for a new group of investors. Once they get money from the new group they distribute the monthly return as promised to the old investors’ group.
In this way they build credibility and sometimes get more investment from old investors. And also new investors referred by old investors only.
Everything is going GREAT for everyone, investors who are earning monthly returns and a scammer who is getting huge capital from investors.
But just think of the time, when scammers stop looking for new investors or fail to convince more people to invest in his scheme?
No monthly returns to investors any more. Finally, the SCHEME COLLAPSE scammer ran away with your money and investors left with no hope of getting back their hard-earned money.
This is how an illegal Ponzi Scheme works and loot your capital. You can protect yourself from falling into such schemes simply by not falling for any plan that shows easy returns on your investment.
Because, there is not any and is the biggest red-flag itself. You don’t have to look for multiple signs to stay away from such schemes.
Be alert and protect your hard-earned money from the evil-eyes of scammers.
In case, you are already a victim of such a scheme then know how to report a Ponzi scheme in India.
If you need any assistance in reporting such cases, then fill in the details below or Contact us on Whatsapp to get a quick response.
