What Are & How To Navigate Through HYIP Scams

Which one would you choose? Would you like to receive a million dollars right now? Or perhaps get a penny and double it for thirty days?

If you do some simple math, the second option yields five times more gains than the instantaneous reward. Thus, compound interest is the secret of how Warren Buffet made his money, and how you could do it too with a High Yield Investment Program. You may have heard their promotions:

“Make large returns from the lowest sums. 50% compounded every day at no risk. Make money while you sleep with this new opportunity!”

There’s one little difference in the way Buffet approaches to finance. He’s an active investor, meaning he will monitor and influence the firm to guarantee the best returns. Also, he religiously follows one principle: “Only invest in what you understand.”

As someone who never invested before, HYIPs can sound exciting. For a world-class investor, it sounds like a scam. Why? What do they know that HYIP traders don’t tell you?

What Are Fraudulent High Yield Investment Programs?

Fraudulent HYIPS are greedy confidence tricks to take your money with the promise of a large return. “You give me a dollar, and I’ll give you two tomorrow.”

These programs promote as if the insiders had some hocus-pocus to multiply money. They hide some secret arbitrage tactics, some alien trading technology, or the next million-dollar stock.

Why is it ridiculous? Because they have the skills and means to double money overnight, but don’t have money. You have to invest in them.

If they’re HYIP is so great, why do they need you? Do they really care about you that much to let you take a chunk of their margins? All you’d do is send money and watch them work. Why would they pay you dividends?

If the program worked, it would be profitable to not share it with anyone. A broker could trade his own money and earn those 200%-per-day guarantees, no distribution. Then why is everyone talking about them? Could it be some social pyramid scam?

HYIPs: How To Make Money With Money

The program you join may work differently than the version they sell you. In fact, it’s better for all if you don’t know too much.

You know just enough so that others get the idea easily and you make money. Everything else is secondary.

If people are making money while they sleep, they’ll leave it in autopilot and forget about it. They won’t question nor try to understand the whole picture.

A legit investment system leverages other people’s skills and talents for profits. Skilled traders borrow someone else’s funds to make themselves money, then distribute profits with you, the investor:

  1. You register an account and add funds.
  2. A group of traders utilizes your money, making dozens of (safe) trades.
  3. They get the whole amount plus benefits, taking a service fee based on the margins earned.

Notice that, if you want to guarantee a certain return per day, you must take less risky trades, which reduces profits. An HYIP can take more risk to promise bigger rewards, but they wouldn’t be as consistent. One day, you may wake up and find all your money lost.

Now, a faulty HYIP would work differently:

  1. You open an account and add funds
  2. You invite as many people as you can to join and add funds
  3. You share those funds with the others who referred you
  4. The new member has to invite another one to make profits

Even more ridiculous, there’s no official registration page. 100% of their members come from referrals; you can’t join without a member invitation.

Learn more about affiliate scams and how to avoid them.

Red Flags Of HYIP Scams

Can you really double your money overnight, several days in a row? World-class investors have trouble crossing the 20% margins per year. These brokers promise you 200% per day, yet nobody has heard of them but you.

Evident truth? Only if you think critically. The moment you’re there talking with them about the opportunity, you won’t be thinking clearly. That’s why it’s good to stop and give time to revise the decision:

#1 Comprehensive Rates

An unknown investment program could make you 2% to 10% max. Anything beyond would make too much noise; millions of people would know about it before you even know they exist.

Most HYIPs, however, sell what by definition is a utopian investment plan

  • Multiply your money overnight
  • Make money consistently day after day, zero losses, no risk
  • Make more money the more people join the program

What’s shocking is, those who persuade you to join the program are making +100% returns themselves, but they still don’t know (or don’t tell you) how they are making that money.

Here’s our guide to accounting fraud & prevention.

#2 High Limits

“If you put $100 in our program, you’ll double the amount every day.”

Knowing how unlikely that is to happen, you choose to play it safe and invest a dollar. The catch? You can’t participate unless you put a larger sum, like $1000.

It makes sense: why would a scammer con you for one dollar? 

Even worse, we sell the program to ourselves after we’ve bought it from the broker. It’s so painful to admit we’re wrong that it’s easier to convince that our purchase decision was smart. The same arguments appear when referring the program to others.

Understand the limit is artificial and has nothing to do with trading. 

  • A scammer can let you play small and make money from a tiny deal. Then, when you’re confident to put a large sum, they rip you off.
  • A dishonest group can fake/misstate your daily profits. You’ll see one thing on the screen, but your bank account will show the contrary.

#3 “One-way” Investing

After hearing their promises, you gained confidence and got into the program. You invested $260, easy, within five minutes. Then you wait.

Day after day, you see the amount growing in your account. If the program delivers, you could reach $2000 within a month, which is almost a 10X of the original sum.

You choose to play a better tactic. Now that you made a profit, you want to get your $260 out and reinvest the rest to work for you. Your order to retire the funds, which takes several weeks of processing.

It seems the HYIP pays dividends once or twice a month. When you want to cash out, they ask you for more verification steps than when you signed in. Despite being weeks arguing with customer support, you won’t collect any sum from the platform.

Learn more about advance fee scams.

Think of the arbitrary rules:

  • We will keep your sum for three months before you can request it back
  • You can’t take the original sum, only the benefits
  • You need to request pay-outs one month in advance

The moment you request, the money goes to “processing” status. It will stay frozen for weeks, but it won’t either compound itself. This system incentivizes you to reinvest by making it hard to exit, keeping your money as long as possible. Preferably, forever.

#4 Value VS Perception

Any system with real clients has something worth buying. If you promise 200% returns, the technology must be so good that it sells itself after the launch. If there’s smoke, there’s fire.

You get into confusion if the HYIP has no history to prove its credibility. There’s a saying:

“You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.”

If they have no background to show, you won’t know if they’re playing on your perception. What works today may not work tomorrow as it’s the case of pyramid schemes and technology fads.

When you look at most HYIPs, it’s about sharing the program and profiting from new members (no product). The system doesn’t make the firm special: anyone can do it.

Here’s our guide to pyramid schemes.

#5 Premium privileges

What’s the contrary of “anybody can do it?” Only you can. Rather than sharing with as many people as possible, the con man convinces you that you’ve qualified for their unique program. 

What did you do to join that insider group? Nothing. Millions of victims think they’re lucky enough to join some prime bank or investment team. What entitles you, a stranger, to benefit from their system? If it was as easy as giving your credit card, everyone would do it.

You can’t join a program you didn’t request first.

#6 Firm history

Would you join an HYIP that just opened last week? You may want to arrive first for the opportunity, but how do you know it’s not a scam? 

You look at the red flags we’ve shared. If there’s multiple, it’s better to let it pass. If the firm opened recently, and you didn’t find anything wrong with it, you should try.

Most HYIPs are scams, others are predatory games, and the few ones that do work only last a few years or months. Rather than looking at the investing model, you should look at who has founded the firm.

An HYIP may not have the background you need, but the founders behind it do. What’s their history as traders? What have they accomplished? You may find documentaries and interviews explaining why they started the program.

Most scammers want to be invisible to their victims. If you find a program with a public known leader in it, it could be a good sign. Just don’t confuse: big names could be getting paid to promote their products.

Learn more about get-rich-quick scams

Preventing HYIP Scams

Does that mean you can’t make money fast? No. If you know where to look, you may find the few HYIPs that work. As a golden rule, understand how the system works before using it.

#1 Where does the money go?

When making money, we use to label as “producers” to whoever offers a service for profit. In HYIPs, both workers and investors can make money, but it still works like a normal business. You, the client/consumer, are buying a service from the brokers/producers.

Why is it important? Because failing to understand how relationships work can lead to affinity groups and confidence tricks. The con man who reaches out to victims refers to them as “business partners,” assuming they’ll work for their same interests.

But the only broker’s motivation is to sell the investment program, not making you money. You’ll find out whether that’s true if you understand how they make a profit with your money. Is it a referral program? Arbitrage? New technology? Pump-and-dump groups?

Most HYIPs are open with their method, even if it’s an unfair pyramid. The thing is, people don’t question the system as long as they’re receiving money. One good starting question would be:

“If I wanted to join your HYIP, what steps would I follow, and why?”

#2 A global view of the company

If the firm is hiding information, you can only learn so much by listening to their story. Legit HYIPs have gone through audits and reviews from reputable websites. An HYIP that doesn’t appear anywhere on the Internet other than on their website should raise suspicion.

Client reviews help if you read them with an open mind. Why would you say they think X of the company? Is it exaggerated? What reviews look manipulated? Are there contradictory statements from one person to another?

There’s nothing wrong with an HYIP having tons of bad reviews as long as they have a good explanation for them. Look at the success stories and what they did differently. If they’re not getting paid to talk high of their program, their opinion will be honest.

#3 Get expert help

Each HYIP makes a different story; you won’t recognize every single scam unless you have an extensive background in finance. It’s not hard to find those people, but finding someone interested in helping you is different:

  • Most advisors you find just sell products as brokers.
  • Some will call themselves “fiduciary advisors” without really caring about the ethical/fiduciary standards.
  • A minority of fiduciary financial advisors will put your interests before their own.

Working with no expert help is neither the solution, especially when moving larger sums. The right advisor can offer you the best strategy to profit long term regardless of the market swings. You can also consult any HYIP idea with them to learn what they know.

The Bottom Line

Most HYIPs are indeed fundamental in greed. But if you want to find the best opportunities, it’s essential to try as many ideas as possible. There’s nothing wrong with entering a fraudulent program if you recognize the scam and get out before it’s too late. The more you see, the better you’ll manage your investments.

Hearing of any “guarantees” should raise concern. If you aren’t who’s paying— or there’s no risk of loss— then you’re the product.

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Joeseph
Joeseph

Alex Echeverry is a con who goes by the name of Alex Echeverria now
He is living with a woman named Yana mandeville who helps him with his scams

bernie
bernie

The United States government runs the equilevelent of a HYIP. It’s called social security. New suckers need to step up and pay for “benefits” so the old suckers can get theirs. The government is bankrupt yet they continue to print money, diluting all currency currently in circulation. If we were to do such things we’d get hauled off to the pokey. What a world, huh?

not a fool
not a fool

I also lost money with Alex Echeverry and Jack Zahran Dikici VB Captial LLC which Jack has many different company names in Va Beach. You can look them up under Virginia Beach Land Records. Glorish.com is one of them and Gloria Ryser is his co partner. Jack and ALex obtained 1.8 million from 12+ investors in the Virginia Beach are in 8 months. You cannot trust ZD10.com either which is one of Jacks websites. Alex has since left the state of Virginia. I am not even sure if they are working together anymore. However, Jack will obtain others socials for… Read more »

Kik
Kik

Shannon,
CAN I EMAIL YOU REGARDING ALEX ECHEVERRY? I WAS CONNED BY HIM AS WELL

shannon
shannon

Google ALex Echeverry and JAck Dikici …..I was taken advatange of by the same scam by them. And many others have also. We need to keep their name out there so that other people will not fall into their lies…

kim
kim

I got caught up in one of these… or so it seems. A person I was dating put me in contact with a person named Alexander Echeverry. He promised me a 100% guaranteed investment opportunity. Said I could pull out at any time, if I ever decided to. Said I would have guaranteed, very high-yeild investment payment returns. He said all of my money was completely secure… blah, blah, blah. He took my money and has delivered on none of his promises. I’ve been listening to him promise payments to me for over a year and a half now. He… Read more »

shearston
shearston

The key rule to investing in hyips is ‘invest early,get out early and dont be greedy’

frank
frank

Hey my name is Frank and am from nigeria..pls can nigerians participate in H.Y.I.P if yes tell me the legitimate ones

Michelle
Michelle

Hi There (Admin)

I never knew what a HYIP was until I got an email sent to me today with regards to joining a new website called me2everyone.com

I searched Google regarding this new site and it came up saying it was a HYIP. Thats how I found your website.

Does anyone know anything about this new website at all?

Kind Regards

Michelle.

Alban
Alban

Wall Street hedge funds and investment banks are basically Ponzi schemes. This spells the end of New York City as financial capital of the universe. If this depression doesn’t destroy them, the numerous law suits popping up in the next year will.

The Obama administration should close down these institutions altogether.

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