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Ponzi schemes

Such lucrative get-rich-quick schemes are proposed by fraudulent companies that promise to offer huge returns to individual investors intending to get their money invested. 

It starts when the clients are contacted through attractive marketing posts about some non-existent investment project that guarantees to offer extraordinary returns quickly. 

The first few investors spread the word to family and friends as they are offered some returns immediately on their invested amount. However, the scheme is not sustainable, as it is not based on researched market vehicles or plans.

Hence, there are no profits. After the first few payments are made from the money given out by the recruits, the scammers disappear with all the collected funds.

Such plans are intended for people with all income levels; even investors from middle and low-income groups may place their money into it. But, eventually, the tricksters run away with their money, and all the deals collapse, and the investors fail to get their funds. 

Moreover, such schemes are unauthorised, having no products or trades, so there is no chance of recovering the losses.

You Are At Risk –

  • If you have been offered the opportunity to attend a presentation where the seller offers deals that appear too good to be true.

  • If you have subsequently bought in new schemes. 

If You Are a Victim – 

  • Report about it to the consumer helpline.

  • If you actively participated, break off the contact and do not spend further.

  • If you have provided all your financial details, alert your bank and modify your security credentials.

  • Keep a record of all communications you receive from such bogus sellers as evidence that you can produce later during the investigation.

  • Be alert that the criminals may target you again with different identities to commit future fraud. In addition, you may be contacted by criminals posing as fraud recovery agents who seek deposits to get your money back.

How To Protect Yourself?

  • If you consider any such kind of deal, try to find out all the related details. Avoid the schemes that appear too lucrative. Always avoid investing in high-yield programs or global currency schemes. 

  • The tricksters may use many different attractive terms to gain buyers' attention. They offer unreliable schemes with no way to gain profits or return the money in case of loss.

  • They adopt hard-selling techniques to pressure the decision-makers and give you no time to research. It would be best if you asked as many questions, not believe the so-called secret ways to get maximum returns or decide in a hurry.

  • Such criminals use attractive brochures, impressive job titles and professional websites to attract people. Also, they hold events and meetings at reputed venues to appear credible.

  • Try to find out about the firm and research its profile, status, and contact information to know the individuals behind it. Then, you can call them on the phone and ask them all the related questions. Finally, seek advice from the experts and then decide. If you suspect a fraud, report it to the authorities.

Date Published: Sep 18, 2023

Types of fraud

A-Z of fraud

To help understand which fraud you've been affected by, we've categorised them into an alphabetical list.

What is fraud and cyber crime?

Cybercrimes can be of two types. First, it can be cyber dependent, where the fraudsters use online devices to convince the victim to accept their offers.

Advance fee fraud

If you are trying to get a loan for a house or a car, they ask to meet the provider to get the financing arrangement and pay the finder's fee in advance.

Corporate fraud

Corporate frauds can be complicated, committed either by the firm or an individual. Nevertheless, it mostly involves cheating where the employee or the firm.

Individual fraud

There are many types of individual frauds related to advance fees, investments, insurance brokers, bogus tradespeople, Ponzi schemes, pension liberation.

Online fraud

Hence the number of cases of online fraud is increasing each year, and most such cases include – account takeover, direct frauds, or scams related domain names.

Identity fraud and identity theft

The criminal uses the stolen identity of another person living or deceased to conduct unlawful activities like obtaining goods or services in another's name.

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