How to avoid becoming a victim of the pyramid scheme

Key signs of a pyramid scheme:

- Active advertising in the media and on online resources, including social media, with the promise of high returns and passive income;

- The company offers to buy movable or immovable property from clients at above-market prices (with installments of three months or more, or at a minimal interest rate), or offers clients to buy movable or immovable property at below-market prices (with a mandatory down payment);

- A mandatory condition is the purchase of a product/service for a certain amount and the involvement of several additional individuals (without retail sales);

- Lack of a license/registration with the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (hereinafter referred to as ARRFRM), including, but not limited to:

banking activities, including deposit taking, loan issuance, transfers and payments, etc.;
securities market activities;
insurance market activities;
Microloan issuance activities;
collection activities.

- Funds are deposited in cash to an individual's card account or through payment terminals to an e-wallet;

- Lack of a precise definition of the company, individual, or public project's activities (statement of unique activities);

- Preliminary (special) contributions for subsequent participation in the company or project's activities;

- Public promise of high returns significantly exceeding the market rate;

- Guaranteed returns (prohibited in the financial market, except for bank deposits);

- Use of words, phrases, and brand book elements of well-known brands in the name, symbols, and advertisements.

- Failure of the company, individual, or public project to confirm its activities (directions for the placement of raised funds, information about their placement). Very often, financial pyramids claim that they operate in areas associated with high profitability: oil production, gold mining, construction, microfinance activities, the Forex market, and the securities market.

Modern means of communication and the Internet have greatly simplified access to services and information, however, has simultaneously become the main medium for fraudulent crimes.

The attackers use methods of psychological pressure, pose as employees of banks, law enforcement and government agencies, and disguise deception under investment projects.

One of the most common methods of fraud is phone calls and messages from people posing as:
4. employees of the bank's security service.
5. Police officers, the National Security Committee, and the Prosecutor's Office.
6. Representatives of the National Bank, mobile operators or financial organizations.
The most common prepositions:
Suspicious card transactions have been identified;
they are trying to apply for a loan in your name;
Your funds are at risk;
A check or investigation is underway against you;
It is urgently necessary to transfer money to a "safe" or "reserve" account.
It is important to know:
Employees of banks and government agencies never request:
1. PIN code of the card;
2. CVC/CVV code;
3. One-time codes from SMS;
There are no so-called "secure and backup accounts".;
Demands for urgency and a prohibition to talk about the call are a clear sign of fraud.
How to proceed:
stop the conversation immediately;
independently contact the bank or organization by the official number;
Do not follow any instructions from the caller.
How not to become a victim of online fraud:
You should carefully study the website, reviews, and compare prices for the product you are interested in;

Get maximum information about the seller or store;

You cannot share information about your bank cards.
Fraud under the guise of investments and quick income:
Fraudulent schemes posing as investment activities, trading, investments in cryptocurrencies, stocks and "passive income" pose a separate danger.
Signs of false investments:
the promise of high and guaranteed returns without risk;
Active pressure and persuasion to invest money "right now";
demonstration of fake licenses and certificates;
using the names of well-known banks, funds, and international companies;
funds transfers to individual cards, electronic wallets, or in cryptocurrency;
displaying fictitious profits in applications and personal accounts.
Common schemes:
"personal broker" or "analyst" in messengers;
investments in cryptocurrency managed by third parties;
closed investment clubs;
Offers to "return previously lost money" for a commission.
Remember:
Legal investment activities are carried out only by licensed organizations. The lack of a license and official registration is a direct sign of fraud.
Shopping and selling on the Internet, you should be wary if:
You are being rushed to pay;
They ask you to provide your card details or SMS codes;
they require an advance payment to anonymous banking details;
the price is significantly lower than the market price.
Recommendations:
Check the seller's reviews and history;
do not transfer bank card data;
give preference to pickup or cash on delivery.
General security measures:
do not share personal and bank information with strangers;
check any information through official sources;
use antivirus software;
Set limits on banking transactions;
If fraud is suspected, immediately block the card and contact the bank.
If you have become a victim of fraud and noticed this after the transaction or purchase, block the card and contact the bank on the day of the transaction to cancel it and refund the funds. If fraud is confirmed, immediately contact the police.

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), as well as for advertising a financial (investment) pyramid (in accordance with Article 217-1 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") and a fine of 150 to 600 monthly calculation indices.

Furthermore, an expanded list of organizations suspected of operating as financial pyramid schemes, as well as those for which court verdicts have already been issued, has been published on the official website of the Agency of the Republic of Kazakhstan for Financial Monitoring (hereinafter referred to as the AFM).

If you are offered to participate in a financial pyramid scheme, you must immediately contact law enforcement agencies in your place of residence, the Ministry of Internal Affairs, and the AFM.

You can also read about modern financial fraud schemes and types of financial pyramids on the financial literacy website www.fingramota.kz in the "Beware of Scammers" section.

Joining a financial 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.

If you have any suspicions that you have contacted a pyramid scheme, you must:

• immediately contact the law enforcement authorities at your place of residence.;
• to the Agency of the Republic of Kazakhstan for Financial Monitoring and the Ministry of Internal Affairs of the Republic of Kazakhstan.

You can contact the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market through the "Financial Pyramids and Financial fraud" section of the Fingramota Online mobile application or by calling the short Call Center number: 1459 (opening hours: weekdays from 9.00 to 17.00).

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

In addition, 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).

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.