Last time, more often we hear about victims of financial pyramids, who lost their savings, trusting promises of the fraudsters about quick and high salaries. In spite of numerous examples and sad experience, people continue to believe crooks who invent new cheating techniques.
Financial pyramid – fraudulent method of income generation through regular attraction of money from new participants. Main part of funds is used by the organizers for their personal aims. Some part of funds can be distributed initially between the participants. But, finally, financial pyramid is inevitably collapsed, since number of the participants is increased, and money flow cannot guarantee promised revenues for all. As a result, the participants lose their investment.
There are some recent shady transactions identified in different regions of Kyrgyzstan:
- The fraudsters told a legend about introducing of common currency in the CIS countries and converting of Kyrgyz soms in this currency. Thus, they insisted the citizens to bring money for exchange in so called People’s Bank promising remuneration and high revenues.
- The crooks offered to buy apartments in constructed building for socially vulnerable population by very good price. First, they have to bring preliminary payment in amount of only four thousand soms! Extorters said that the rest amount will be paid to the construction company.
- Fraudulent enterprise charged 1000 soms from each trusting citizen promising to pay benefits in amount of 12 thousand soms during three months, employ people in non-existing construction company with salary from 600 to 1 800 USD. The most attractive in promises was a possibility to buy apartment by price twice below the market one.
- Very common machination is when the fraudsters urge to deposit money and get high interest or bring new depositors and they will be paid remuneration.
- Another known case with microcrediting company “Monoldor-Ata”, which founder borrowed money from people under interest. Thus, she managed to misappropriate about 200 million soms from 600 people!
- The fraudsters can act referring to famous companies or famous people.
FINCA Bank urges you to be vigilant and resist provocations of the crooks. Remember key features of financial pyramids to avoid networks of swindlers and loss of own savings:
Feature № 1. Promises of guaranteed high income
The crooks easily guarantee profitability in 50, 100 and even 200 percent of interest per annum. Optimal profitability on reliable investment instruments should be between rates on deposits and average interest on bank credits. If profitability, you are offered, exceeds rates of bank credits (22–25 % of annual interest in national currency at the market of Kyrgyzstan), such organization is probably financial pyramid.
Feature № 2. Lack of product
If there is no any product in the organization you were invited, it is financial pyramid. Disguised financial pyramids can be also met. They have product but no one uses it: they are tourist services (elite rest), programme on computer literacy, foreign languages and so on. Company promoting these products, actually generates income only from money of newly arrived people.
Feature № 3. Revenues through attraction of other people
If your main objective is attraction of other people and your income if formed from money these people bring, we can say definitely: this miracle organization is financial pyramid.
Feature № 4. Lack of access to information about top-management and financial reporting
If data on management is classified, you do not get financial reporting, it is worth to think carefully before they bring their own savings. In reliable companies, everything is transparent, open and available.
Feature № 5. Initial fee is required
Some small start-up amount in average from 100 to 500 USD is required to join pyramid. Money you put on deposit can move through big number of countries: in Kyrgyzstan money was received, in Switzerland – insured, in USA – shares are bought and so on. They lose opportunity to control financial flows. Also, involving you in financial pyramid, its organizers can use specific terms like Forex, Stocks, Futures contract, Trading, etc., which are not clear to professionals.
Feature № 6. High promises of financial independence
Very often, the organizers of financial pyramids use manipulation of new participants. They talk about financial independence and freedom, give high promises. People who have skills to manage emotions of other people act as public speakers.
Feature № 7. Meetings and drawings
Do not accept invitations to take part in collective events, drawings of various prizes and tourist vouchers. Financial pyramids do that for created image of successful and profitable company.
Key tip: To avoid becoming a victim of financial pyramid, it is necessary to follow elementary vigilance – do not believe promises of high guaranteed profitability and do not entrust your money to doubtful companies and people. Consult with professionals of the financial market. Do not allow emotions and money to take power on you; manage your emotions and money independently!
Before you invest your money, check all foundation and permitting documents (licenses, certificates, etc.). Ask financial reporting and information about top-management. Check how they generate income of the company (where will they invest your money), and possibility of repayment of your savings.
FINCA Bank officially states out that it does NOT conduct any actions, in a course of which the participants must pay money or make any contribution.
If you face with case that name of FINCA was mentioned in connection of such actions, please, contact call center 4400 in order to get accurate information.