Pyramid schemes on social media
Just like any other scams, a variety of pyramid schemes surface on the internet, especially prevalent on social media platforms which are interactive and disseminate information quickly.
Fraudsters can promote scams through online advertisements or social media. You may have seen investment advertisements on the internet that promote the idea of making quick money, or received messages on social media that solicit you to invest. In recent years, we have seen pyramid schemes soliciting investments in virtual currencies and dating softwares, or to act as an agent for mobile apps. These scams are designed mostly for social media users.
To lure potential victims, fraudsters often position their pyramid schemes as high-return schemes that allow people to make easy money at the comfort of their own homes. Participants may actually earn some money at first, which is said to be “return” from the scheme, but in fact, this is just the bait to entice participants into increasing their investments. Those who recruit others into the scheme may also receive commissions such as higher returns on investments. However, sooner or later the fraudsters will run off with all the money from the scheme, which leads to the halt of interest payment to participants. This is when the participants realise they have been deceived. Unfortunately, it is already too late to recover the principal at this point.
Fraudsters come up with different investment plans to prey on social media users. To avoid falling victims to pyramid schemes, pay attention to the following:
- Don’t be greedy
To draw the attention of potential victims, fraudsters often highlight the “high return and low risk” nature of their investment plans. Bear in mind that believing in this kind of “investment opportunity” will make you an easy prey.
- Think twice before putting your trust in “experts” online
Fraudsters can easily position themselves as “investment experts” online to sell “high return, zero risk opportunities” products such as virtual currency. You should always be vigilant, especially when a stranger you “meet” online is trying to gain your trust and your investment in some unknown schemes.
- Think twice before forwarding a message
Many of us forward messages on social media platforms without thinking twice. However, if the message concerns solicitation and promotion of investment products, we should in fact think twice before hitting the send button. By forwarding such messages, you may unknowingly become a culprit of the swindlers and pull your friends and relatives into potential scams.
- Staying abreast of the latest on scams
Get an understanding of the workings of topical scams by staying on top of current affairs.
22 April 2020