Once a core group of happy customers has been formed they are instructed to go out and recruit other investors. On top of their initial returns they earn a generous introductory commission. The problem is that once the scheme runs out of clients for its hungry machine or the police close it down, the majority of the Investors lose. There is no shortage of clever con men with a new angle and no shortage of people wishing to make a fast buck. Regrettably it s the people who can least afford to lose their money that are caught the most.
Awareness is the first step to stopping the sharks in their tracks.
If more people knew about these scams fewer people would get bitten. If you are an employer send a memo out to your staff warning them of the dangers of giving their money to unconventional savings schemes. Encourage them to come forward and ask questions, this kind of mentoring goes a long way to preventing them from handing over their cash. Start a discussion with friends and family about scams and keep your ears and eyes open for media reports. If you think you have been a victim of a scam, don t be shy about discussing it or bringing it to the attention of the authorities, you may help someone avoid the same mistake.