High-yield investment program (HYIP) is basically a form of scam. Previously, it was applied to denote an investment program that provides substantial return on investment. The expression HYIP was misused by the con artists to disguise their scams as legal investments.
About High-Yield Investment Program
High-Yield investment program is a kind of scam or con job. Earlier, the expression High-Yield investment program was applied to denote an investment program with large returns. Nevertheless, the expression HYIP was improperly used by the con artists for disguising their scams in the form of legal investments.
As a result of its extensive utilization by the con artists, high-yield investment program has got virtually synonymous with Ponzi Scheme or scam.
The majority of high yield investment programs reveal small or no information regarding the management, area and other features about the mode of investment. This is due to the reason that in most of the cases, money is not really invested.
In addition, the high yield investment program initiators expose comparatively brief details about how the returns will be produced, which they claim or intend to provide.
They say that they are involved in different forms of stock trading and commodity trading operations, which actually they are not.
In some instances, they introduce themselves with some type of assurances, appeals arousing strong feeling and solicitation for trust, which propose to offer the investors financial independence.
The online High-Yield investment programs seldom persist higher than one or two years and normally receive limited amounts of deposits and at the same time, assurances are given for amazingly increased returns. A large number of instances indicate that high yield investment programs are Ponzi schemes, where the fresh investors offer the cash for giving the profit to the current investors, which they normally take back. This initiative permits the scam to go on till the time fresh investors are there to come up and/or current investors are entrusting their money in the scheme and this is termed as compounding (as more profits are assured).
The entry of e–currencies has enabled the high yield investment programs to function over the Internet and get across international borders and to receive huge amounts of small-scale investments.
High yield investment programs commonly receive investments through e-currencies like INTGold or e-gold and specific third party payment processing devices are used and they are as follows:
Ordinarily, the high yield investment programs provide a fairly large incentive commission (for instance, 9 percent of invested deposits) for participants to draw in and make references for fresh investors.
Till date, the biggest high yield investment scam that happened on the Internet was People in Profit System or Pure Investors or PIPs. This investment plan was commenced by Bryan Marsden in the earlier part of the year 2004 and extended over 20 countries. In the year 2005, an inquiry was conducted on PIPS by Bank Negara Malaysia as a consequence of which Marsden and his wife were penalized.
Forms of High–Yield Investment Program
The high-yield investment programs can be categorized into the following forms:
- Long term high-yield investment programs
- Medium term high-yield investment programs
- Autosurf programs
HYIPS under Probe or Indictment
Ginsystem Inc. (Singapore) – Commercial Affairs Department of Singapore recovered 2007–07–01
12DailyPro Autosurf (United States)–US Securities & Exchange Commission (SEC)
OSgold (Australia) – news.com
IT4US (United States)
PlexPay (Norway) – HegnarOnline (in Norwegian)
Studio Traffic/Studiopay (NYPD, FBI, United States)
Solidinvestment (United States)
Last Updated on : 4th Oct 2016