Ponzi schemes

Training 835 minutesponzi scheme

You are 29, a taxi driver saving $4,000 for your wedding. A coworker praises a club where "money grows 30% a month". In a Ponzi scheme, new deposits pay the old investors.

Training goal: Keep the wedding fund safe

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Situation

1. Your coworker shows you: $1,000 went in a month ago, $1,300 came out today. Now the invite: join too.

Put in $1,000, the payouts are real
Put in everything while it is open
Ask how the club earns 30%

2. The club pays $200 for every friend you bring. Your cousin gets excited too.

Show your cousin the pyramid red flags
Bring your cousin for the bonus
Stay out yourself and say nothing

3. Two months later payouts stall. The club asks your coworker for $500 more "to unlock withdrawals", and your coworker asks you for a loan.

Lend $500, it comes back with profit
Lend at least $200
Say no and urge a report to the police

4. The club's site is down. The same people post in the chat: "We will recover your losses, just join our new fund." The wedding is 10 months away.

Put in $300 to win back the losses
Wait, maybe the site comes back
Park the $4,000 in a savings deposit

What you will learn

Guaranteed high returns and recruiting bonuses mark a pyramid.
Early payouts are real and serve as bait.
A fee to withdraw your money means the pyramid is falling.

Your real-life step

Check where your savings sit: is the company on your country's regulator register?

Questions and answers

How do you tell a Ponzi scheme from an investment?

A Ponzi scheme promises high steady returns, cannot explain its profits and pays for recruiting. Real investments are open about risk.

Why do Ponzi schemes always collapse?

Payouts need a constant stream of new money. When it slows, there is nothing to pay with and the organizers vanish.

Can you get money back from a Ponzi scheme?

Sometimes partly, through court or the organizers' bankruptcy. Report to the police right away and keep receipts and messages.

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Numbers are illustrative. A game, not financial advice.