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.HYIPs 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.
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
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.
Besides 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.
These 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.