Home » Scams » How to Spot a Scam – Learnings from my Losses

How to Spot a Scam – Learnings from my Losses

On my previous post, I have shared to you what happened when I lost a lot of money investing in scam investment instruments. Here’s some learnings I’d like to share with you. I hope that this will be helpful in identifying scams.

What I Have Learned (That Might Help You):

  1. Don’t join HYIPs!
  • 95% of HYIPs are Ponzi Schemes
  • Only early investors can profit
  • Only high-risk investors who can play with the system can go away still with money. They usually know that the site is about to close soon. Late investors usually lose all their investments
  • After getting huge losses, you may become vulnerable to investing in exchange of high returns – think 100x before you invest. Don’t invest more than what you can afford to lose so you can sleep soundly at night.

You are an Early HYIP Investor if:

  • Only few registered members

  • Website is operational for just few days only

  • Active referral campaign ongoing

  • Low volume, low-value deposit and withdrawal transactions are being shown on the site

  • Regular news updates or communications being sent to members

  • Sites Social Media accounts (like Facebook) are active

You Late HYIP Investor if (or Site is About Close Down if):

  • High number of registered members

  • Website is operational for more than two weeks (some HYIPS close down as early as 2 weeks

  • Last-minute promos are sent to member enticing them to invest more to get higher returns

  • There’s a surge on withdrawal requests of huge amounts

  • Payment status starts to show as ‘Pending’ or frequently having issues with the system

  • News updates are rare. If any, it’s regarding their payments issue advising members to remain calm and that they’re working on it.

  • Social Media accounts seldom have posts

  • You’ll start to hear complaints about frequent Website Maintenance, website is down or there’s delayed or difficulty in getting payouts

2. You can’t recover your lost funds anymore – as they are not insured

  • Once the site closes down, you can’t recover your deposits and/or profits anymore from the site or from someone else.
  • All Blockchain transactions are irreversible. You can’t take back the funds you have sent already.

 

3. After the site closes down, either these can happen:

  • you might receive email from someone attempting to be the admin of the site that who can help you recover your funds.

Sample Message to Investors from Fake Admin

  • A new site introducing themselves that they are the closed site and the money has been hacked, and they’ll need some money to gain back access to their database or backup that will help them retrieve your funds – if this one is true, why don’t hey just deduct it from what they will recover?

Sample Phising Site

  • One or multiple FB accounts under the sites name will emerge also giving people instructions to send money so they can recover their funds.

4. Watch for Ponzi Scheme Red Flags and do some Research

  • Fixed rate cryptocurrency return – This is ironic as the number of cryptocurrency that can be mined becomes less due to halving and increased difficulty through time
  • Unbelievably high interest rates – If it’s too good to be through probably it is. If you’re not comfortable investing and feeling that it’s a huge risk, then don’t!

Sample Investment Returns Options

  • They capitalize too much on their referral programs – They provide high incentives by referring as much as you can, as this is where the Ponzi scheme is relying on

Sample Referral Program

  • Persons introducing themselves on-site as part of the administration team are not real persons, only just pseudonyms – A simple Facebook search will not locate their profile
  • No physical establishment for their address mentioned on their online – Related to this, no pictures of their establishment are showing on-site, site images you may be seeing might just be copied from other sites
  • They mostly rely on cryptocurrencies of electronic payments (like Paypal, Payeer or Payza) to complete transactions – As credit card transactions can still be reversed with prompt notification of your bank

Most scam sites prefer digital or anonymous payment methods.

  • Terms used or the model they work on how they are able to manage to get huge profits for investors are vague.

Sample of vague terms on how they earn

  • They are listed as ‘Scam’ or ‘Not Paying’ on HYIP monitoring sites like Goldpoll.com or Badbitcoin.org

Sample HYIP Monitor

  • There’s no product or service you’re getting in exchange of your investment.

A great visual Infographic about Ponzi schemes is shown here:

Ponzi Schemes

5. If this happens to you, DON’T LOSE HOPE:

  • We all screw up at some point in our lives and don’t blame yourself in falling prey to these online con artists.
  • If you lose huge money, charge it to experience. We may have lost a lot, but still, we learned a life lesson at the end of the day.
  • Don’t waste your energy and forget about your health thinking about your losses as lost money can be regained, but not lost health.
  • God knows what’s best for us as he’s preparing us for greater things – entrust everything to Him. He’ll provide more than what we need. Sometimes God frees our hands from what we’re holding on as He plans to give us something better. Ask and we shall receive. Appreciate every single blessing in life. Happy are those who feel contented on what they have.
  • For more advice – I’d like to share one of the blogs I’ve read during those times I’m recuperating from losses.

Thanks for reading my detailed story. On my next post, I’ll share how I recovered and how Hashflare turned my Rags into CrytoRiches story. Stay tuned!

Please also follow and leave a comment if you like posts like this with detail account of the events relating to my investment experiences.

References

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