What is a Pyramid Scheme?
These are fraudulent entities that use swindles to con their victims into paying off the highest-ups. They insist that they will return your funds when it’s time. It’s a little similar to classic Ponzi schemes, only now they make the “opportunity” to receive your money. And, while classic scams aim to coerce people to invest in their “opportunity,” pyramid schemes target people who can least afford the risk or are lacking in knowledge on what scams to look out for. These pyramid schemes tend to target regular people, and they can happen anywhere in the world. And it can happen to anyone you know.
Fund recovery companies are in the business of recovering stolen funds from scammers.
What Happens When the Pyramid Scheme Goes Bust?
To better understand the aftermath of a pyramid scheme going bust, one must ask the following question: When does a pyramid scheme “go belly up?”
To understand this question, let’s look at a classic scenario.
Say that you’re a small-time investor. You buy a share of an e-commerce platform like Zeek.com. The platform will become the new top dog on the scene, and it will ultimately rise to the top of the “webdom.”
At first, the money is working great for you. Then the platform starts to crumble and your initial investment has been lost. You have to settle for a losing investment for a long time.
Now it seems that it’s impossible to get back that initial investment. You’ve been burnt, in more ways than one. But, you have the option of becoming a shareholder of the company.
How to Recover Your Money
But how do you reclaim your stolen funds? According to Martin Brinkmann, a senior security consultant with SecureWorks, fraud victims can use a few straightforward tricks. “Fraud is a crime of opportunity, so the criminal is always going to look for a target of opportunity,” he says. “The best way to catch a fraudster is to simply follow up on any account activity that looks suspicious.”
If you see an unusual transaction on your credit card statement, call your credit card company immediately. But to avoid getting scammed in the first place, Brinkmann also recommends that victims take some proactive steps in order to avoid falling victim.
Remove all social media accounts that you’ve never used before.
Online Pyramid Scams – How They Work
One of the simplest ways to explain online pyramid scams is to get the basic facts straight and then we’ll proceed to the inevitable questions you have, which we will answer.
How are Pyramid Scams Developed?
It is often a result of information overload in our life that we become victims of scams. The combination of this information overload, distractions from many online competitors and access to the Internet in general means we are vulnerable to an easy setup.
If a product or site is presented by means of persuasive language, a website that seems trustworthy and has proven loyalty to you, even for a moment, there is a high chance that you will fall for the online con and lose large sums of money.