What Is Ponzi Fraud?
Ponzi schemes are illegal in the United States and the UK. It is a fraud that preys on gullible people by gaining their trust. A person will create a fake website and get investors’ money. Instead of investing it in the real economy, they have to pay money to the top investors, making the scheme seem legitimate and lucrative.
The money received by the scammer is used to pay out other investors, causing the original investors to become completely broke. The money that the scammer is supposed to be using for real business and investment purposes are used to pay off the original investors. When there’s not enough money left to pay off the original investors, the scammer stops paying them, which brings the financial collapse that’s described below.
How to Protect Yourself From Ponzi Fraud
Make sure that you always do your research before you do business with anyone. Read about a company on bbb.org so you can learn about the legitimacy of the company. Check to see if they are registered with the Better Business Bureau, and even check their rating.
If you’re in the midst of working with someone and it doesn’t seem like they are for real, it’s important to move on. There are many other online businesses that provide legitimate services, but beware of companies that take advantage of their victims.
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Frequently Asked Questions About Ponzi Schemes
Most of these questions are related to Ponzi schemes and how to spot them in the first place.
Recovery Solutions for Ponzi Fraud Victims
Let’s take a step back to understand this typical type of fraud. You may have heard of something called the Ponzi scheme. You can learn more about Ponzi scheme frauds here. A Ponzi scheme is where a criminal entrepreneur is able to defraud his victims by collecting early investment funds from them and then using those funds to pay previous investors without actually giving the previous investors the profits they should have received.
To learn more about how a Ponzi scheme works, read the following case study written by Nicholas Mariano, a recovering victim of a Ponzi scheme.
It was all in a scam
Fraud from all angles… With enough greed on the part of the schemer, they can swindle unsuspecting investors out of hundreds of thousands of dollars.
Equally valuable as money and time are, they are not infinite resources. If you are going to risk losing it all for the possibility of finding a better option than current jobs, then think twice. To safeguard against loss of savings, start a savings plan today. If you don’t have one in place, you should. Now, if you have a formal savings plan in place, the next step would be to try and increase the amount you are saving. Depending on the amount you have, this may take some time, but the longer you work at it, the easier it will be for you to be able to achieve your savings goals. Saving money is hard and time-consuming, but once you get the hang of it, it becomes second nature.
Using your money wisely can be hard.