By Gerri Elder
The birth of the Internet gave con artists a new way to lure victims into their fraudulent schemes. It is now easier than ever for criminals to take advantage of those desperate to make some quick cash.
Beware of any scheme that offers a deal that seems too good to be true, because it probably is.
One popular method used to scam people out of money is High Yield Investment Programs or HYIPs.
These type of "investment" opportunities on the Internet are often high tech pyramid schemes.
These programs make promises of high returns on deposits and depend on finding new participants to put money in so that the profits can be paid to the existing members.
When the scheme fails to attract enough new investors, the pyramid collapses and leaves the investors with nothing—and sometimes leading them into bankruptcy.
No money is ever actually invested by these schemes, it is simply a money laundering funnel that usually doesn't last long.
HYIP scams usually rely on payment methods such as e-gold, e-bullion and INTGold, which are similar to having participants fork over cash.
For instance, once a person spends their e-gold the transaction can not be reversed, even if it is fraudulent. Perhaps this is why these schemes do not allow participants to make deposits using PayPal, a payment method which gives protection to buyers against fraud and theft.
One interesting thing to note is that some of these HYIPs offer to pay investors their profits via PayPal.
This raises a major red flag because they don't accept incoming funds through PayPal.
In some cases the schemes are worse than just a pyramid scheme in which the odds of a payout are always a gamble.
In cases where payouts are made through PayPal there is always a risk and real possibility that the HYIP scammer may pay your profits with a stolen credit card.
When the profits are put into your PayPal account using a stolen credit card the money is not yours.
Once the card holder or issuing bank realizes that there has been fraudulent activity on the card they will close the account and notify PayPal, who will then freeze your account. If by some chance you have already been able to withdraw the stolen funds from your account you must pay it back.
You also risk being investigated for credit card fraud because you were unknowingly a part of the scam.
The really sad part of these scams are that they usually target people looking to make quick cash who can't afford to lose what money they have.
People who desperately need money to avoid filing bankruptcy or foreclosure often fall victim to these schemes because it seems like a way to make easy money fast.
Some HYIPs will lure victims in by initially paying out small amounts to convince participants to put more money into the scheme.
Excited by seeing a quick profit, many people fall prey to the con and max out credit cards or borrow money, fully expecting a bigger payout that will never come.
It can not be stressed enough that you need to thoroughly investigate and research any supposed online money making opportunity before shelling out a dime.
Don't rely on websites who recommend and rate HYIPs because they are often paid to give a positive review. Be very skeptical of any program or opportunity offering easy money.
If you do not understand exactly where your money is going and who is handling it you should avoid the program at all costs. Listen to your instincts; when something doesn't seem right it usually isn't.