Do you know about various fraudulent methods which can harm your hard-earned money? There are many ways which are used to earn illegal money. In this article, we will share some insights regarding a method that came into the limelight recently and share some viewpoints through which you can save yourself from this scam.
People must be aware of various methods through which they can be looted. Therefore, people, they are asking, What Is the Ponzi Scam? It is especially in the news in the United States.
Why is the scam in the news?
It is in the news due to Bernie Madoff’s death; he was considered a Wall Street Wizard. He earned his money through the investors by claiming a good return to them but later refused to pay them. He used to earn such activities, and if clients asked for money continuously, he used new investors’ money to clear off old clients’ backlog. In this way, he continuously cheated people.
What Is the Ponzi Scam?
The Ponzi scam is a method in which the original investor is looted in the name of some scheme of returns. It is a method in which the new investor’s payment is collected to pay off the old investor. The scheme operators promise the investors to gain extraordinary profits from the investment with no risks. But, in reality, the money is not invested, and it is used to pay off the old investment.
How can the Vicious cycle of the Ponzi Scheme Busted?
We hope that What Is the Ponzi Scam is clear to you all; now, we can focus on how it works and how it is busted. Ponzi scheme’s main motive is to lure new investors into earning money by promising substantial returns. Once a new investment is received, the money is returned to the old investor as a name of “returns.” The investment cycle goes on until the investors take back their money and the scheme tumble down.
How can you save yourself from Ponzi schemes?
As you are now aware of What Is the Ponzi Scam, what could be the significant features which can determine the Ponzi scheme and how you can save yourself from getting trapped into it.
- High returns in a very stipulated period: If some investor promises to pay you high returns for your investment in a very less period, you can adjudge that the scheme could hurt your hard-earned money.
- Unregistered and unlicensed company: If you find that the company is unregistered and does not have a license, you can save yourself from investing in it.
What Is the Ponzi Scam? must be the question in everyone’s mind to be aware of it and save themselves from getting trapped into it. In the news in the United States, Bernie Madoff died who was involved in this scam and took the money from the real investors.
Have you ever heard about such Ponzi schemes? If yes, then do share your views about it in the comment section below.