How to avoid becoming a victim of the pyramid scheme


Are you offered to invest money at very high interest rates? Do they promise a guaranteed income and ask to actively involve your friends in the project?

Be careful, this organization may turn out to be a pyramid scheme! The peculiarity of the pyramid scheme is the promise of quick and easy money.

It should be remembered that financial pyramids do not belong to the financial institutions and do not have a regulatory license to accept deposits, open and maintain bank accounts of the individuals, and, accordingly, are not controlled by the financial regulator - the Agency of the Republic of Kazakhstan for the Regulation and Development of the Financial Market.

What to do if you are caught in the pyramid scheme

The entry into a financial pyramid, as a rule, occurs on a voluntary basis and without legal support. This means that no one gives any guarantees of return on investment.

Therefore, do not succumb to provocations if you are in a hurry to sign an agreement and deposit the money.

Your actions:

  • Once again, make sure that this company is not a pyramid scheme. Be guided by the above signs of the financial pyramid.
  • If you want to withdraw your funds, then immediately prepare for the fact that it will not be easy.
  • If you have documents confirming the fact of transferring money to the fraudsters (agreement, bank statement, cash receipt), immediately contact the law enforcement agencies proving with them.
  • Among the victims of the pyramids there are many people who have lost small amounts. Most people accept the loss of the money. This contributes to the fact that the scammers continue to deceive the people. If you have been deceived, do not be silent, act. An important point in the fight against the fraud is to make the case public.
  • Work together. Contact a lawyer who has experience in such cases. If possible, find other victims of the scammers and file a class action lawsuit.
  • If you are faced with a financial pyramid, then report this fact to the Agency of the Republic of Kazakhstan for the Regulation and Development of the Financial Market by e-mail or by hot line contacts: +7 (727) 2788 122, 2788 144.Also through the mobile application " Fingramota Online ", 24/7 users can ask questions regarding the violation of their rights as consumers of financial services, the terms of use of financial products, as well as interaction with financial institutions, report cases of financial fraud and suspicious organizations in whose activities signs of financial pyramids.

Types of the pyramid schemes

How to recognize a pyramid scheme and avoid becoming a victim of the financial scams?

The fraudsters and organizers of the financial pyramids create more and more sophisticated schemes to take money from the citizens.

There are several types of the financial pyramids, depending on the areas of their activities:

Investing in the long-term projects

According to this process, the company (group of companies) carries out activities to attract the citizens to the investment projects. The main features of these programs are constant investment of the money for a period from 3 to 120 months (on average from 2-5 years), the guarantee (promise) of the income, as well as the bonuses in the form of travel vouchers and sweepstakes.

The member deposits the money monthly/quarterly for 3-4 years, thus paying the company's obligations to the previous members.

Investing in the short-term projects

This type of pyramid is aimed at quick collecting of the money from the people in the short period (a large number of people with a minimum contribution). Massive advertising is carried out in the social networks with further invitations to the online chats, groups and channels.

To enter the program, you need to pay (from 500 tenge or more) and attract other participants (the more people, the more the opportunity to earn) with the promise of high profitability (from 100%).

Example 1. When investing 5,000 tenge and inviting the 3 additional participants, the participant receives 15,000 tenge (of which the 5,000 tenge is his invested amount, 10,000 tenge is the investment of the other two participants; the 5,000 tenge is the third participant investment, which is received by the organizers).

Example 2. A participant needs to invest 1,000 tenge and needs to invite other participants. He will receive 500 tenge paid by each invitee.

Example 3. A participant invests from 20,000 to 400,000 tenge for a period of 5 days or more, with the promise of a reward from 30% to 70%.

Using network marketing as a cover for the illegal activities

The main principle of this type of pyramid scheme is to attract the participants. For these purposes, various certificates are used, jewelry, cosmetics, body care products.

Help in saving the money to buy the real estate, a car and other expensive property

Such financial pyramids require you to make a small cash contribution to the savings program, at the end of which they promise big money. For example, a participant invests $ 800 for a period of 6 months, at the end of which he receives a reward of $ 19,200 (2,400%). The amount of remuneration, as a rule, can be influenced by the number of invited participants and the amount of their investments. There are programs providing for payment of the remuneration in the amount of 200% or more, with the main condition that the participant transfers the rights and (or) pawn the property as the collateral.

Membership in the exclusive club

The clubs offer cruises, tours, training on creating and promoting business, marketing, copywriting, teaching palmistry, astronomy, psychology, numerology, and more. The participant needs to attract other participants and (or) pay the entrance fee within a certain period, depending on the programs (from 1-3 to 5-10 years).

Platform for binary options

Attracting money to the binary options, investing through special platforms, etc. The process is carried out as follows:

  • The organizer, through social networks and Internet resources, attracts individuals for training on the operations on the securities market.
  • Further, after the training, the client is offered a special platform on which it will be possible to carry out operations to purchase and sale of the securities, operations with binary options.
  • The client begins to carry out transactions using a demo account (virtual account for the beginners) and using a program (the platform operating system), which creates the conditions for opportunity to earn.
  • The client carries out transactions using the real money.

In cases where the client does not have enough funds, then he can receive bonuses for the each invited participant.

Most of those platforms are foreign, and the companies registered in Kazakhstan provide consulting services.

Financial pyramid in the form of a consumer cooperative

Currently, one of the most popular alternatives to the bank mortgage is joining a consumer cooperative (PC). There are cases of using consumer cooperatives for illegal activities. In particular, such pyramid schemes offer their members preferential terms for paying initial payment for purchase of the real estate/car if other participants were attracted.

The more participants the client invites the better loan conditions the PC offers him.

The fraudsters skillfully manipulate the people's credulity and desire to get rich quickly and easily by misleading the people.

Responsibility for the creation of the financial pyramid, for the distribution of advertising activities

More than 30 countries are banned from pyramid schemes. Including in Austria, Great Britain, France, Canada, Italy, China, United Arab Emirates.

The Republic of Kazakhstan provides for:

  • criminal liability - for the creation and (or) management of the activities of the financial pyramid (in accordance with article 217 Of the Criminal Code of the Republic of Kazakhstan);
  • administrative liaibility for the production, distribution and placement of advertising of the activities of the financial (investment) pyramid (in accordance with Article 150 Of the Code of the Republic of Kazakhstan "On Administrative Offenses").

How to recognize the financial pyramid

  1. The need to invest a substantial amount of money.
  2. The promise of high interest and quick return on investment.
  3. To receive a payment, you need to involve your friends so that they also invest their funds.
  4. The project is presented as "know-how".
  5. The company was registered on the eve of the fundraising, it has a minimum authorized capital and a single founder. You can check the registration on the website of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan through the "Search for taxpayers".  
  6. Active and obtrusive advertising on the social networks, various presentations, drawing of all kinds of prizes, gifts, vouchers, mass distribution of leaflets, e-mail newsletters.
  7. The absence of any signed contract or it is drawn up in such a way that all risks fall on the client, and the company does not bear any responsibility.
  8. A company may call itself a microfinance organization, a credit bureau, an anti-debt program, a financial services center, an investment company, etc. For example, they use slogans such as “Have you been denied a loan? We will help! " “We will refinance your loan! Let's get rid of debt! "," Get a mortgage on preferential terms ", "Want to get rich quick and easy?" and etc.
  9. There is no license of the financial regulator represented by the Agency of the Republic of Kazakhstan for the regulation and development of the financial market. The register of organizations that have been registered is posted on the official website of the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan under the heading "Activity" "Register of permits and notifications".
  10. Accept cash or use various systems of internet payments and transfers without the use of special bank accounts og the company.

By adopting the distinctive features of fraudulent schemes, you can protect yourself from the actions of unscrupulous "pseudo-entrepreneurs" and save your money.