Whenever a financial offer or investment sounds too good to be true, chances are you’re dealing with a pyramid or Ponzi scheme you should stay away from unless you want to part with your hard-earned money.
These schemes are illegal and any money you make from them will have to be paid back when they fold, and you could even risk being prosecuted if you participate.
Every week brings news of a new scheme that leaves consumers with empty bank accounts instead of ‘earning’ a large interest rate on their ‘investments’. So, why do still fall for whichever the next scheme is on the horizon?
Simple. Because they are desperate in a time of financial volatility and uncertainty.
The Financial Sector Conduct Authority (FSCA) often warns consumers about various money-making schemes that are usually not registered to render financial services. These schemes are usually pyramid schemes or Ponzi schemes, but few consumers know what that really means.
And not knowing means they are more likely to believe promises of ‘doubling’ their money within a few moths or interest of 50% per year.
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