What Is An HYIP? Why Should You Avoid Them

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Sat, Dec 30 - 4:30 pm EST | 11 years ago by
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    Lured by the ‘guarantee’ of easy money, high returns and fast cash…HYIP Scams on the Internet are alive and well thanks to Google Adwords, Sponsored Links and digital currencies such as e-gold and e-bullion.

    The abbreviated Wikipedia definition of an HYIP is, A High Yield Investment Program, or HYIP, is a purported investment program normally offered via the Internet. HYIPs typically accept investments of $500 or less while promising high returns.Adwords Example HYIP AdvertisementHYIPs are Ponzi schemes, in which new investors (usually unwittingly) provide the cash to pay a profit to existing investors, which they typically then withdraw leaving nothing to pay the new investor.

    This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme, known as compounding (because even higher profits are promised). HYIPs are frequently advertised in HYIP monitors (see below), spam emails, forums, mailing lists and Google AdWords. People are typically given a commission (for example, 9% of invested funds) when they provide a referral of a new customer.

    E-gold Funding Examples and Tutorials plus links on these sites.

    HYIPs typically are not based in places such as the United States, western Europe, or Japan – which have strong enforcement against unregistered investment opportunities. Most HYIPs disclose little or no detail about the underlying management, location, or other aspects of how money is to be invested, and relatively little information (other than asserting that they do various types of trading on various stock and other exchanges) on how they actually generate the returns they purport. They are sometimes presented with some form of an emotional appeal, appeals for faith, and promises that they will help investors achieve financial freedom. The introduction of e-currencies has made it possible for HYIPs to operate on the internet and cross international boundaries, and to accept large numbers of small investments. HYIPs usually accept e-gold, e-bullion, INTGold (*now closed), and until Feburary 2006, StormPay.

    Google Sponsored Links Example

    Google E-gold HYIP Sponsored Link

    It now appears, since e-gold is cleaning up their act, that they may begin banning the use of e-gold in such scams. Let us hope so! However, there has been no such notice from e-gold Ltd. as of yet.

    HYIP Exampe AdBesides annoying spam, most suckers get referred to these scams by forums such as Talkgold.com or ‘investment rating’ websites with catchy names like HYIP Explorer or the HYIP Advisor. Even HYIP.com shows the blatant scam title text of “Online Investment Monitoring Service – Invest, Make Money Online”. These ‘rating’ web sites are just large referral and advertising pages designed to earn residual income from visitors and extra money from the scam operators.

    HYIP Exampe AdThese web sites are basic scripts anyone can buy, plug in scam HYIP investment referral program and collect the referral fees. Depending on your SEO skills, your web may ‘advise’ or ‘refer’ thousands of ignorant victims into send money to these fraudulent webs. It is just another profitable way to steal from people.

    GoldMoney has quite a different attitude towards investment scams. The GoldMoney policy is ‘NO INVESTMENTS’ including HYIP scams. They don’t allow it and they never have.

    Of course each of these webs will give you details on how to set up and fund an e-gold account. The easier they make the investment – the faster they can get their money.

    With phrases like “Guaranteed Profit” and “You cannot lose your money” who can resist a 2-4% daily return? Too bad that after you send your hard earned funds in, a week later the web disappears. But you were referred by Google Adwords and Google “Sponsored Links” on the top of each search query, how can it be fraudulent? Good questions because Google is actually profiting from the scam.

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      • http://www.stopbeingavictim.com/?id=742624623 Rian

        Yes…

        HYIP I stand for “Helping You Into Poverty” Fast. It’s not durable.

        Easy come and easy go….

        I’ve invested my small fortune to test if this is legit opportunity or not. Now, I can relieve my self to know that this is a real ponzy schemes.

        Rian
        http://www.StopBeingaVictim.com/?id=742624623

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      • http://hyip.com HYIP.COM

        The highest realistic investments returns are indeed known to general public, yet the fact remains, hundreds of thousands of web surfers from all over the world, are (in majority cases) knowingly participating in such HYIPs. Short term investments, high returns, real ‘I got paid’ reports are some of the factors that too many people cannot resist.
        Perhaps, it is human nature and there is nothing that laws and/or authorities can do to completely eradicate these entities.
        They were there since Mr. Charles Ponzi times; they are here today, they will be here tomorrow in various shapes and forms. Unfortunately, we learn best lessons from our own mistakes.

      • http://digitalmoneyworld.com/ Mark

        You are correct, the frauds and scams have been around long before Mr. Ponzi, it seems his name got stuck on the ‘fast money high return’ scam. The problem is, and HYIP, despite its name, is NOT an investment, its a ponzi scheme. The daily active people who send in money over and over again trying to get a large amount paid back, KNOW that its a gamble they may lose it all. However, out of 1000 people who do it, I doubt more than 400 of them expect to lose. Let me give you an example, online casino slot machines, people who participate know going in, that they may lose their ‘investment’ as you call it. That up front knowledge of the possible loss or high return it not only ‘known’ its disclosed, “”"you might not win so be prepared to lose your money”"”
        In an HYIP, nothing like that is ever disclosed and like I said about 600 people in 1000 are surprised when they get ripped off. Lack of disclosure, fraudulant remarks and comments about where the money is going DISQUALIFY an HYIP as any type of ‘investment’. I’ll pay you to show me a few HYIPs, that disclose, “next week, we will be taking all the ‘investment’ dollars and screwing you. These are the long lists of complaints received by the government types. Its sad, its not a ‘realistic investment’. But again, there is a sucker born everyday, so if I was not writing about it for at least a few people to read, they may get scammed also. By your rules, if you can get away with the lie, its OK….they should lose their money…suckers. That is not correct.

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      • kumararavelu

        cheated the people. god will punish them. they are bastards..son of a bitch…will defiantely go to hell when they die. lost my hard earn money.

      • Gimidia

        You Guys are discissing issues wthout giving a solution when you know internet citizens out there would need some one to show the the way

        Why can’t come up with some nice programs to help instead of shouting all the negatives,

        With so many experts like you we should be drawing in solutions

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