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The Story Behind HYIP Scams


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The term “high-yield investment programs, " also known as HYIPs, didn't always have the negative connotation that is associated with it now. The term was first used in the financial services sector to refer to an investment program that might have offered a high return. But that meaning changed when scam artists who ran money-making schemes ("Get rich quick!) abused the term to make their operation seem legitimate.

The method HYIP scammers employ is simple. Usually, they set up a website that offers an “investment program" with returns as high as 45% per month or 6% a day. The program gives little or no detail about the location, underlying management, or other aspects of how your money is to be invested-because no money is invested. Scam operators also use vague explanations and assert little more than that they are involved in different types of trading on various stock markets or exchanges in order to generate the returns they report. The SEC has said that these schemes “seek to mislead investors by suggesting that well-regarded and financially sound institutions participate in these bogus programs. "

And yet, not all HYIPs are scams. The best way to ensure you are investing in a paying HYIP is to educate yourself. HYIP monitors, or HYIP listing and rating sites, are personal or commercial websites that list and/or promote HYIPs for referral commissions. The monitor charges each HYIP a listing fee which is usually then invested into that program, although there exist free listings and occasionally monitors who invest their own money. The monitor then labels the HYIP as a “paying" or “not paying" scam depending on whether interest is received within the terms specified by the program. Monitors also allow other HYIP investors to rate and comment on the programs, based on factors such as payout promptness and the responsiveness of the HYIP administrator. Programs with higher ratings achieve higher rankings on the monitor sites, which coupled with a “paying" status may entice more investors who rely on the monitor.

You can defend your investment and make money the smart way by educating yourself on the characteristics and trends of HYIP scams. educates people on how to make money on the internet and avoid being trapped in a HYIP scam . Billings Farnsworth is a freelance writer.


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