Everyone would like to grow their savings as much and as quickly as possible. This desire is taken advantage of by the organizers of financial pyramids, although they can in no way be considered savings instruments, contrary to the expectations of many naïve people. The National Bank of Moldova, in a series of materials produced in partnership with the Independent Think Tank “Expert-Grup”, warns that all financial pyramids collapse, this being only a matter of time. According to the NBM, there is no guarantee that the people will be able to recover the invested money, IPN reports.
The central bank explains that a financial pyramid is a system in which participants receive income not from real investments, but from the contributions of new participants. Usually, the organizers of a financial pyramid promise very high returns (for example, 300% annually). The first participants, delighted with such a profitable investment, tell their acquaintances about their success, which leads to an increase in the number of participants in the pyramid. At the same time, the collected money is not directed to investments, which is it is not multiplied on the capital market or in the production sector, but is simply redistributed from the new participants to the old ones. In this way, only the first participants and its organizers gain in a pyramid and these disappear with the money collected from the last waves of participants.
Those who set up a financial pyramid, as a rule, promise fantastic returns, tens of times higher than the average interest rates on bank deposits or the yields on securities. Such actions are accompanied by aggressive advertising with exhortations to invest as soon as possible – “Hurry up! Be the first!” – on television, on the Internet, in public transport, the organization of large-scale events involving a lot of people and creation of colorful websites with an abundance of photos of tropical landscapes, which suggest the wellbeing that the investor will reach.
The advertisements insist that “profit is guaranteed”, which never happens in the case of real investments because profit, in fact, represents the payment for risk – the higher the return, the greater the risk. At the same time, the answers to the questions about how the money will be invested and what is the source of such high profits are vague. Another clue is the lack of any information about the founders, constitution documents and financial situation of the company that collects the money. Sometimes, false documents are presented.
“Scammers are increasingly using the online environment and methods of remote “treatment” of victims. Some pyramids have sophisticated websites, which can make one think that it is a big and serious business. Other pyramids, on the contrary, do not have their own websites, but work exclusively in messaging apps, such as WhatsApp, Telegram, etc.”, explained the NBM.
Individuals are advised to study the information about the company, the constitution documents, reports and licenses of this. If there are no such documents or they turn out to be false, it is clear that it is a financial pyramid or another fraudulent organization.
“What should we do if we invested money in a financial pyramid? First of all, we should ask the company to pay back the invested money. It is good if we have documents confirming that the money was transferred. If we do not manage to recover the money, then we can notify the National Commission for Financial Markets of our suspicions. We write a complaint to the Prosecutor’s Office. We clarify in advance all the facts we know about the organization and its representatives,” the National Bank also recommended.
