Sports bets. Trading academies. Monetize the internet. Financial Freedom. These are all combinations that you will find in Ponzi-type scam proposals: You only have to pay to learn and you get four times what you put in.
How do I know I’m facing a pyramid scam?
1. Promises of high returns with little or no risk. One of the biggest red flags is the promise of high financial returns. This is practically impossible in any legitimate investment.
2. Guaranteed returns. Any plan that offers “guaranteed” returns should be viewed with skepticism. In the world of investments, very few things can be guaranteed.
3. Focus on recruitment. If the compensation is based more on recruiting other investors than on the actual sale of a product or service, it could be a pyramid scheme.
4. Opaque and confusing structure. If it’s difficult to understand how the investment works or where the money goes, that’s a red flag.
Followers of this type of schemes call leaders “mentors.” -many of them viral on networks- that openly disqualify their peers, who are making an effort to study or finish a university degree. And they usually encourage them to leave their formal studies for these types of “liberating experiences.”
In the world of investments, very few things can be guaranteed.
Laura Pereyra, PIN Capital.
These “mentors” of the scheme usually have several similar characteristics. They are between 25 and 30 years old and say they dedicate themselves to trading since 18 years old. They talk a lot about financial freedom and retiring at an early age..
They seduce with phrases like: “I teach people how to turn their cell phone into an ATM.” They talk about “monetizing the internet” or “developing digital entrepreneurs” insisting on the idea that their only intention is to educate.
What are the most common tricks these scammers use?
Exploit trust and personal connections: Scammers use personal relationships to recruit new investors, known as «network marketing» or «multilevel marketing».
Pressure to act quickly: Potential investors may be urged to invest quickly through pressure tactics or creating a feeling of scarcity.
Use of false testimonials and misleading information– They use fake data to make the scam look legitimate and attractive.
Limited transparency: They hide or misrepresent information about the financial health of the company and how funds are being used. Nobody regulates them.
In networks they are generally easy to detect because they are ostentatious characters.
Laura Pereyra, PIN Capital.
In networks they are generally easy to detect because These are ostentatious characters., which show their supposed luxury cars or huge houses (which are usually rented). And they promise to dollarize your economy towards much more profitable assets than those common people know.
The hook is to make you feel ignorant of a world to which they, or a few, have the key. and that – waving the flag of inclusion – they are going to share with you so that you are part of their community and “not left out.”
One of the best-known biases when investing is at work here: FOMO, or in Spanish, the fear of being left out of a unique and unrepeatable opportunity. To be more specific, the elemental and primitive fear that if I don’t follow the herd I am making a mistake.
The impulse of someone who is a social being, like humans, is to imitate the behavior of their peers. Zebras do it when they run for fear that the lion will devour them. And we replicate it when we run after an immediate reward.
Alert Upper Valley of Río Negro and Neuquén
In our area there is an “academy”, an organization denounced and investigated by pyramid scams in different countries, both in Europe and America. They come from other provinces in the North of the country, replicating the story of what happened to the Sports bets who came from Mendoza more than two years ago.
The promise in this case is to show you the keys to generating income in dollars with the internet. To achieve this, they use the sale of trading and network management courses as their main attraction.
Concepts. The term is used trading when we want to refer to the purchase and sale of financial assets (such as stocks, bonds, currencies, commodities and derivatives) with the aim of obtaining profits from changes in their prices. The traders They usually carry out these operations in short periods, from minutes to days, seeking to take advantage of market fluctuations.}
The term trading is used when we want to refer to the purchase and sale of financial assets with the aim of obtaining profits from changes in their prices.
Laura Pereyra, PIN Capital.
It is no longer a profession that can be learned in a four-month course by looking at graphs. The great professionals that I know in this field not only have a solid undergraduate and postgraduate university economic training, but they usually occupy the most important operating tables after certifying complex suitability exams.
They generally operate a single asset of which they are specialists.. That is to say: there is the Table of Equity (or actions). The Bond Table, the currency table, etc. It is not that a Trader trades all assets every day. They generally focus on always seeing the same thing due to the complexity of the maneuvers they perform.
Returning to the network mentioned above, they promise great returns through crypto businesses. Why do they use unregulated currencies and platforms?
Simple. First of all, the people who access these spaces usually do so with black moneynot registered and anchoring through “caves”.
Just as it happened with ZOE GenerationWhen the pyramid falls, the virtual money goes up in smoke and is easily withdrawn to various accounts in the name of the developers.
The intention of these lines is not to point out the lack of financial education only in a poorly educated sector of the population or in secondary schools, it is lacking everywhere!
Laura Pereyra, PIN Capital.
Secondly, when the victim wants to prosecute the case, he must declare that money invested in black or white.. And if the second is more than the first, the justification of funds, the declaration of origin is complicated and in this way again, the scammers win since they know that they will only respond – as happened with Cositorto – for a much smaller portion of the money. that they stole
If you want to hear more about this topic, you should download the podcast ZOE Generation (on Spotify), which also gave rise to a series on Netflix that premieres the week of May 25.
This is the largest pyramid scam in the history of our country, which took the money of many, especially in the province of Córdoba where an entire community lost everything. It is estimated that in total (declared white money) the losses were recorded at US$75,000,000.
These people not only stopped creating jobs, buying goods in the real economy, buying long-term assets just to be guided by short-term reward. But also many went bankrupt and lost everything they owned, having to start from scratch perhaps at 50 or 60 years old..
The power of convincing that these tricksters have is so incredible.who have managed to get university spaces in Neuquén or Chambers of Commerce in Río Negro to lend them their facilities to do their induction courses.
The intention of these lines is not point out the lack of financial education only in a poorly educated sector of the population or secondary schools, it is lacking everywhere!
In the Chambers or Professional Associations, in the Universities and cloisters of people who have been able to educate themselves more than the average, they have fallen into various scam schemes, or fictitious trusts. These fall like a house of cards when the base of the pyramid stops supporting fiction..
Most used scheme
To enter a person has to pay a membership of U$200 or U$300. It is funded from virtual wallets. If you bring a friend you get a 50% bonus and then you are provided with a trading simulation platform where you play trading.
At some point they make you believe that this money is real and that you can withdraw it whenever you want. The profits accumulate and possibly the first withdrawals to the bank can be made without problem (this is how the confidence that “I take it out whenever I want”) is consolidated.
After weeks or months pass, the person (or several people at the same time) want to withdraw or liquidate the position and… here they realize that they will never be able to do so. In the enthusiasm, savings and more money surely derived from strengthening the invested capital.
Recommendation
It is unnecessary to look for the company in the CNV or in any control body to realize that they are not authorized to operate.. This is something we always recommend doing, looking for the license plates at the National Securities Commission of both the firms where they take their money and the Advisors they speak with.
Do not give away the fruit of your effort. Taking care of investments also means seeing to whom I am delegating the risk of losing everything.