Ponzi schemes are considered fraudulent. That is because in these schemes, money coming from new investors is used to pay off the old investors. The creators of such schemes usually tell you that they invest your money somewhere else to generate the unreal returns that they will provide you in the long run.
However, the person behind the Ponzi scheme never reinvest your money, and uses the money from new investors to pay off the earlier investors, and the cycle keeps going until the creator of the scheme disappears.
Here are some of the red flags associated with Ponzi schemes you should always look out for when investing your money anywhere. Check out the NRGY review for more details.
Before blindly investing in any investment scheme, you should make sure that the company you are investing with is registered with the securities and exchange commission of your country. If they are registered, you can access any data about them before making your final decision about investing with them. However, if the company is unregistered, you should never invest with them no matter what. That is because an unregistered company is not regulated by any state institution, and can scam you anytime.
If you cannot understand the Investment and returns procedure of any scheme, you should stay away from that investment. Ponzi schemes usually utilize this type of technical jargon to avoid you from digging deeper into their features, which are only made-up.
Sketchy History of The Owner
You can find the honor of every Ponzi scheme quite easily. Once you find the owner of your investment scheme, search about them online and read their history. If they have a history of committing fraud, odds are that you are going to invest in yet another fraud made by them. So, avoid investing in a Ponzi scheme and keep your money safe.