How not to become a victim of a pyramid scheme?

How not to become a victim of a pyramid scheme?

Introduction

Are you being offered to invest money at very high interest rates? Promise a guaranteed income and ask to actively involve friends in the project? Be careful, the organization may turn out to be a pyramid scheme! A feature of the pyramid scheme is the promise of fast and easy money. It should be remembered that financial pyramids do not belong to financial organizations and do not have a license from the regulator to accept deposits, open and maintain bank accounts of individuals, respectively, they are not controlled by the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan.

  1. The main features of a financial pyramid

The absence of a license /registration of the Agency, including, but not limited to, to carry out: activities in the securities market; banking activities, including attracting deposits, issuing loans, making transfers and payments, etc.; activities for issuing microcredits; collection activities.

Massive advertising in the media, Internet resources, including social networks, with the promise of high profitability, passive income.

The company offers to buy movable or immovable property from customers at a price above the market (in installments of three months or at a minimum interest rate), and on the contrary offers customers to buy movable or immovable property at a price below the market (with a mandatory advance payment).

The company offers to become a member of a joint venture/ company with a mandatory contribution of initial capital. A prerequisite is the purchase of goods / services for a certain amount and the involvement of several additional persons (there are no retail sales).

The money is deposited in cash, to the card account of an individual, or through the terminals of payment organizations to an electronic wallet.

There is no precise definition of the activities of a company, an individual, or a public project (a statement about a unique activity). Availability of preliminary (special) contributions for subsequent participation in the activities of the company or project.

A public promise of high profitability, significantly exceeding the level of the market indicator. Guarantee of profitability (this is prohibited in the financial market, except for bank deposits).

The use of words and phrases or symbols in the name, symbols, advertisements that make them look like well-known companies, brands.

Attracting funds from the population to various kinds of programs, including the purchase of cars, apartments, land plots, consumer goods, etc., acting as an alternative to a bank loan.

 The contract is formulated in such a way that the company, individual or public project does not have any obligations to the investor (depositor) of funds.                    Or the contract is formulated in such a way that the return of funds by the investor (depositor) becomes impossible even in the event of termination of contractual relations and non-fulfillment of obligations on the part of the company, an individual or a public project. Anonymity – lack of specific information about the founders and managers of the company or project (surname, first name, patronymic, biography), lack of financial statements.

The absence of an office or the presence of an exclusively nominal office, for example, at the place of registration of a legal entity or the place of residence of an individual.

Registration of a company in an offshore jurisdiction (Cyprus, Seychelles, Belize, etc.), if the "pyramid scheme" is organized in the form of a legal entity. Investments in non-existent assets and (or) projects, with the promise of payment of guaranteed income (property benefits) significantly exceeding the market level.

  1. How to recognize a pyramid scheme

The three stages of the pyramid's life:

The first is the creation of a financial pyramid. As a rule, the organizers pay the promised income to the first participants from their own funds, although the participants contribute both small and significant amounts.

The second is the popularization of the financial pyramid. Inspired investors attract more and more participants, including relatives and acquaintances. The organizers also use aggressive advertising, mainly on social networks, with the involvement of well-known bloggers, celebrities. At this stage, the remuneration to new participants is no longer paid at their own expense, but at the expense of newcomers.

The third is inevitable, this is the collapse of the pyramid. This happens when a certain number of participants and a large amount are recruited. People who believe in quick and easy earnings are left without remuneration and without their own funds. And also without the possibility of any protection, since the activities of financial pyramids in Kazakhstan are illegal and illegal, which means that all documents signed with the organizers of the pyramid actually have no legal force.

  1. What to do if you are caught in a pyramid scheme network

Entry into a pyramid scheme, as a rule, occurs on a voluntary basis and without legal support. This means that no one gives any guarantees for the return of invested funds. Therefore, do not succumb to provocations if you are in a hurry to sign a contract and deposit money as soon as possible. If you have any suspicions that you have contacted a financial pyramid scheme, you must: immediately contact the law enforcement agencies at your place of residence,

 in the Ministry of Internal Affairs;

to the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market

Department of Economic Investigations in East Kazakhstan region at the address: Ust-Kamenogorsk, Novatorov str. 7/2 or by helpline:8(7232)-24-06-05.

You can contact the financial regulator through the section "Financial pyramids and financial fraud" of the mobile application "Fingramota Online" or by the short number of the Call Center: 1459 (opening hours: weekdays from 9.00 to 17.00).

The official website of the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has published a list of persons who have signs of activity to attract money from citizens and organizations, with the promise of payment of guaranteed income (property benefits), including the actions of which citizens have received complaints from the ARRFR.

Also on the official Internet resource of the Financial Monitoring Agency of the Republic of Kazakhstan, an expanded list of organizations that are suspected of operating as a financial pyramid has been published, as well as for which court verdicts have already been passed.

  1. Responsibility for the creation of a financial pyramid, for the distribution of advertising activities

The ban on the activities of financial pyramids is provided for in more than 30 countries. Including Austria, Great Britain, France, Canada, Italy, China, the United Arab Emirates.

Kazakhstan provides for:

criminal liability

- for the creation and (or) management of a financial pyramid scheme (in accordance with Article 217 of the Criminal Code of the Republic of Kazakhstan), a penalty of imprisonment for a period of 5 to 12 years is provided

-  for advertising a financial (investment) pyramid scheme (Article 217-1 of the Criminal Code of the Republic of Kazakhstan), a penalty of imprisonment of up to 4 years

is provided for administrative responsibility

– for the production, distribution and placement of advertising of the financial (investment) pyramid (in accordance with Article 150 of the Code of the Republic of Kazakhstan "On Administrative Offenses").