Ponzi Scams are pregnant with tons of red lights that make them easy to spot. My mission today is to help sheVestors out there to see the red scary danger signs in order to prevent them from being scammed. Fortunately, I have never been a victim to such scams and I hope that by the time you are done reading, you will be on the alert as well so that you don’t have an encounter with the Ponzi Scammers.
RETURNS ARE OUTRAGEOUSLY HIGH: In a legitimate investment business, as much as you get higher than the amount you initially invest, such returns are within a fairly minimal range. For example. You invest 400gh cedis ($100) and over a 3 month period, you get a return of 20% of your initial investment. With Ponzi schemes, the returns are as outrageously high as 100% or more of your initial investment. The fascinating factor is that such returns are accrued over an overwhelmingly short period of time. Any firm that promises you such an arrangement is a Ponzi organization. Sure at the beginning, it might look legitimate because you get your returns, but before you know it, they will suddenly disappear without a trace albeit with all your money too. It is too good to be true, odds are that is likely, not true.
RETURNS ARE CONSISTENT: Aside from the phenomenon of high returns that I discussed above, Ponzi schemes show consistent gains regardless of the fact that the market situation is not constant. In legitimate investments, returns fluctuate in that they are sometimes high and other times low, depending on market trends. However, with such scams, the gains are always on the rise. They never fall no matter what.
THEY DON’T STAY IN BUSINESS FOR LONG: From my observations, I have noticed that these schemes usually disappear within a short period of time. They don’t stay around for long because once the cash flow dries up and there are no more investors, they cannot pay their clients. The sudden manner with which they begin operations is the same way they disappear. You might log on to their sites and get feedback like site temporarily out of service, access denied, etc. you may even go to their offices and discover it is out of service.
DETAILS MATTER: What information is available about the investment firm? Have they provided a legitimate source by which investors will be making their investments? If there isn’t a great deal of information available about the company, hold on to your money. Shady businesses thrive on providing sparse details and only highlight the high returns. You need to know who is handling your money and what that money is being invested in. If such details are not made abundantly clear, chances are that it might be a Ponzi scheme.
WATCH OUT FOR THE MAD RUSH: If there is an ‘out of nowhere’ craze for a specific financial investment, you should be curious about its legitimacy. There are thousands of legitimate investment plans provided by recognized banks and financial institutions. These legitimate investments exist without a lot of fun fare however with Ponzi schemes, where there is a mad rush with a lot of people signing up. You may be encouraged by friends and family to join, but take your time to conduct some personal investigations first. The fact that your best friend or sister recommends it does not make it legitimate so tread cautiously.
I graduated from the University of Ghana with a combined major in Linguistics and Spanish (BA). I am currently pursuing a Master of International Studies at the North Carolina State University. I also work as a Teaching Assistant with the School of Public and International Affairs of the same university. I run a blog where I publish fictional stories and articles about everyday life issues. I believe that as women, we ought to build up and empower each other because if we want to gain the respect of men, we need to start by respecting other women as well.