nobsMailing List
Sign up for our free monthly e-newsletter.
nobsNetwork
Nobs Network Forum Nobs Invest - Nobs Investment Community Nobs Forex Blog Forex for Beginner
nobsPopular Entries
Imagine you were a scammer.
What would you want? What would be your most important goals?
To get as much money as you can and to get out clean.
Most HYIP investors seem to have problem putting themselves in the scammer’s shoes. This of course means that they are honest people and hardly can think like a scammer, but also makes them naive and pliable to fraud.
In two occasions I regularly see some otherwise smart people to turn naive when it comes to high yield investing.
Private Programs
It’s widely known that when a program announce going private that often means they are about to scam. However if the program keeps paying after few months of closing for new members, most investors turn into easy believers.
Their arguments are simple: “If they were a scam why would they not accept new spends?”. “If they were scam, why would they be paying and not just pack and run away?”.
These arguments of course make sense. But I have answers which also make sense. Let’s before that see the other occasion:
Programs Paying Refunds
This does not happen so often in the HYIP world, but recently we’ve seen some major scams to issue refunds before disappearing (MPDW, GoldenRocks, WiredSurf, FXIG and more).
Of course the first thing which comes to your mind when you see a program to issue refund is that it can’t be scam. Why would a scammer pay some of the money out instead of running with all of it? Why did MPDW paid some money at the end, why did GoldenRocks refund some happy members?
There are good reasons for doing this…
The Reasons
In both occasions listed above we have basically one and the same thing - a program which does not take money, but pays out. Just that fact by itself immediately makes most of us think that the HYIP in question is not a scam.
They want us to think that.
It’s really as simple as it sounds. They do it because they want us to believe. Why? Just because of their ego and to calm down their destiny? Maybe some con artists have some moral, but the majority do not.
The reasons are mostly two:
Fear
Have you ever done anything wrong in your life? Have you been unfaithful in your marriage, have you skip reporting taxes or have you driven with higher speed that allowed? If ever you’ve done something wrong you may know what the fear of the consequnces is.
The fear is what makes scammers do everything possible to make you believe they are honest. They are afraid of being caught and put in the jail. We as investors know that this happen very rare, but when you are on the other side, the things are different. Even the slightest danger of being caught breaks your sleep and nerves.
This is especially valid for scams which have provided admin’s address and ID. (MPDW or FXIG for example). If people understand that they are scammed and know the admin’s name and address they can send authorities against them or just go crazy and visit their houses to “advice” the scammer in person.
That’s why instead of just disappearing such programs issue parital refunds, report losses, keep posting in forums or update their members by email about the efforts to “recover” the program.
Future Plans
I can’t believe that many investors don’t think about this. If you have ever invested long term you shouldn’t be surprised that the con artists invest in their fraudient business too. Creating a HYIP scam is a business and these worms are investing in their business in their future.
They issue refunds now to return in the future with their new “limited time” or “private” offer. They are not accepting members now to make us believe that they are for real. Then they will either start accepting members in a new sub-program or just allow the current members (who are completely devoted at this stage are are ready to get a second mortgage) to add more funds to their investments.
Don’t be naive, the scammers are not stupid. They don’t act straight and their intentions can’t be decrypted so easy. They don’t follow the simplest logic - if they were doing that, they would never survive the competition. If the scammers were not sophisticated, they wouldn’t be able to take so much money from the investors.
There were few real HYIPs who strugled to clean the face of this arena. Most of them just failed, other survived to make 3% - 5% monthly (which is great of course), but most which people considered “real” were just scams. See for example the Scam Warnings at HYWD.info. All these programs were trusted at some point, people were passionately defending them on forums, some of them were private, ID verified and issued refunds. They are all scams now. Browse the net to study their stories and you’ll learn a lot about the sophisticated scams.
I still haven’t seen the real HYIP which pays 10% monthly or close to this figure. Believing that such exists and will work for your $100 is simply naive.
Tony Clifton, HYWD.info
Popularity: 3% [?]
Fantastic blog entry mbongwe.
This entry touches several psychology factors of a scammer as well as from investors point of view. Noteworthy.
Thanks, Jude
There is only one exception to this rule and that’s real estate. I see some real estate businesses online that perform average between 10 and 15% monthly which are still running after 5 years.
But you need a lot of investors and a lot of capital to be able to do some serious real estate businesses. One project can easily require 100k$ so it aint easy to get enough investors to collect the required amounts.
Forex trading is a lot different. The main reason old forex sites all died and collapsed is because none of them were real. Lets go back in the past. I honestly believe that before 2004, it was very hard, maybe impossible to find a trading platform online fast enough to trade at a decent level.
So the only way to trade was to take members money offline, trade it at the stock market offline, and then transfer the money back online to payout people. Too much of a hassle in my eyes. Lets talk again in 5 years from now, I want to bet some forex trading sites will break the 5 years lifespan. Most sustainable forex programs will average around 5-6% monthly.
A third way to make sustainable profits is to create a company that offers some form of advertising. But in this field there are companies that broke the 5 year lifespan already.
5starpromotion is one of them but what about search engines like yahoo? Sure they dont share their profit with you, but yahoo surely is a company that earns money through advertising and search engines.
The average monthly profits for these kinds of companies are only a couple pennies monthly for most people? Why so low? Well, simply because this market is oversaturated and one ad is viewed by so many peoples there is barely any cent left to pay you. Now why does yahoo and google for example make millions of $$$ with advertising? VERY simply : “they dont share their profits with you or just a very very small fraction of it! “
“they dont share their profits with you or just a very very small fraction of it!”
Well, Makilla, that’s simply because no one NEEDS to share their profits with you. There are millions of ways to raise funds and making a HYIP is the most unsuitable if you are the one who makes the profits. Even if a forex trader can make 10% monthly ROI consistent, why on Earth will they share this profit with you? They can lend money from bank or from private lending house paying 10 TIMES LESS interest. That’s why the HYIP from the investor’s dreams will never exist. All HYIPS are either scams or just projects of people who really need your money. And such people don’t make 10% monthly.
Excellent article, mbongwe!
The purpose for any real business to open a HYIP should be to use other people’s money (OPM) to produce profits. Because they’ve used OPM, instead of a bank loan, they need to share those profits with investors.
Most real businesses can get a bank loan or private investors, if they don’t have enough starting capital.
That’s why we see so few real businesses in the HYI industry.
JMO,
Sharon
P.S. I tried to leave a comment on the scam warnings page of HYWD, but it keeps telling me that I’ve entered a bad code. What code do we need?
Thanks, Sharon
Yes, you are right OPM concept is good by its self, but it rare makes sense when you accept $10 or $100 deposits and deal with hundreds of “investors”.
About the PS: Isn’t the page displaying an image with a code? I got several people complaining about that, looks like my captcha is not working for some readers :/
Hi Jude,
I liked your article and I wasn’t aware of this “Private” schemes.
But it got me concerned a bit, and I’ll explain why.
As I run RTA Online Investment program, those who are familiar with the program are aware that the program will go “private” in a way, at some point, as I announced at the launch of the program.
If you are not familiar, I’ll explain it in a few words:
Program generates a marketing revenue which is divided among users. The daily ratio is calculated as proportion of total revenue and total number of points (users investments) of the previous day.
I count on a growth of the marketing revenue accordingly with the growth of the users / regular visitors, not necessary investors.
So you can imagine at some point I have to stop accepting new investments otherwise the daily ratio will fall significantly, in spite of growth of the revenue.
At that point we can say the program will be “private”, and in fact users will be allowed to share their points to each other (or the new users) at the market price. The point is, I will accept new users, but not new investments. New users will buy points (think of it as shares) from the old users.
Marketing revenue will continue to feed the program and bring the interests to the users.
So if you say (and it makes sense in your article) that the announce to go private is the scam alarm, I should not go private (stop accepting new investments), but accept new investments until the whole thing blows?
I admit this all looks very confusing, but my point is that I believe I will HAVE TO go private to prevent my program turning into scam!
On the other hand, if the growth of the marketing revenue will grow hand-in-hand with the growth of the investments, maybe there will be no need to go private…
The bottom line is: the program goal is to raise the marketing growth as much as possible and to keep the investment growth low as much as possible; and to stop the eventual fall of the daily ratio (interest) I will have to stop accepting investments at some point.
Phew!
I hope I didn’t confuse you too much guys
Regards
Max
P.S.
Sorry, Clifton! I just realized you are the author and not Jude!
My apologies
Max
“Even if a forex trader can make 10% monthly ROI consistent, why on Earth will they share this profit with you? They can lend money from bank or from private lending house paying 10 TIMES LESS interest.”
What if you are a 21-year old student that doesnt want to take a loan at the bank because most likely they wont give it because he doesnt have an income, and secondly, because he doesnt want to due to tax involvement reasons..
What would that 21-year old student do? ;).. I think there are exceptions, thats all I am saying
I strong agree with what Steven is saying here as well
I’m dealing with some of the exceptional ones and am quite happy with them.
You can’t get more transparency than those that are currently on my portfolio right now.
In placement, honesty to me is on #1, followed by capabilities to earn and then how the team/ person runs the program.
Mybongwe,
If you can find one a sure one, I will be pulling all my Ks from CEP.
So what is your point of writing your article? Where do we go from now? All of these sites are all fall in your category of being scams? Do you have good solutions or advise other than to quit this field and that all of us go back and find a job?
Maybe you have a special site and only one site that is not a scam? Come on share! Dont be selfish
HI Marius,
Many of us, including Jude and Mbongwe, have had a change in direction as far as our portfolios. We’re trying to invest in programs that have a real, viable business generating returns and the person(s) running the business has a knack for brining in more positive returns, than negative.
There are couple of places where you can find our portfolios. The easiest way is to log into NoBS Network and look up our profiles or look at our profile block in an of our posts.
I hope this helps to answer your question. If not, I’m sure Mbongwe will speak up.
JMO,
Sharon
Jude and Steven,
Do you put PeterB and his CFXT program in the “scam” category. If memory serves, you have touted this on as one of the best programs. And what about LifeHoldings?
I think the advice in the article is good, but to put all in one basket is as irresponsible as not doing DD at all.
The tone of the article is “run for the hills - you can’t trust anyone”.
Sharon, reading mobongwe’s articles, seems there no guarantee that those portfolios are safe and not going to scam. Look at TFT that was listed in nobs lists. So if mobongwe is really right, then there is no reason to be here all of us including him. Lets all packup and find a job.
Otherwise, BigMike is right.
I suppose GoldenRocks is a perfect example of what this article was trying to say!
I’ll try to answer everyone but in short now: the simple point of the article is not to trust any HYIP with more than you can afford to gamble /wow, that sounds like ABC of high yield investing ;)/.
No I have no 100% secure program, Marius
I don’t advice anyone to stop invetsing in HYIPs or to continue investing in them - it’s completely your choice. My point however is that you can never be sure they are honest.
My point also, although not directly said in the article, is that this is not really investing. It’s not investing when someone have 100% control over your money and can run away with them at any time (even if today he/she is honest). It’s not investing when you are giving someone your money and hoping they’ll do it for you. Investing is when YOU have the control over your money (even if other people manage them). This could happen if you hire trader, open managed account, invest in mutual or hedge fund or something like that. In all these cases you are not dependent on someone’s good will.
Max, as for your program my advice is, when the time comes, to go private without giving pre-announce. Usually the announces “program will go private in 1 month” or so is considered red flag.
As for the 21 year old student, the first thing I would do is to call Jude or few other nice guys and ask if they are interested to lend me some money and earn interest on them. Yes, this will be a HYIP, but just with few large investors. Believe me, no trader who knows what they are doing would ope n a program to deal with $100 “investors” who each month withdraw $5. This could happen only in some very special occasions like Max’s RTA is (because he really needs investors, but not too much of their money).
“As for the 21 year old student, the first thing I would do is to call Jude or few other nice guys and ask if they are interested to lend me some money and earn interest on them. Yes, this will be a HYIP, but just with few large investors. Believe me, no trader who knows what they are doing would ope n a program to deal with $100 “investors” who each month withdraw $5. This could happen only in some very special occasions like Max’s RTA is (because he really needs investors, but not too much of their money).”
Hmm, being that trader, I didnt have contacts such as Jude… I did have to small start with $300 in the beginning, after 2 weeks my biggest investor atm was convinced to invest, and he’s still doing so over and over, every time I prove to him that we can make that profit… Of course the DD he did on me is the maximum you can do: ID, Adres, Phone number, Private Phone number, RL meeting etc etc etc, it doesnt end, kinda scary, but of course that guy knows I’ll never run. Same for Jude, he did invest also, and he knows I’ll never run.
So I can totally agree on the rule ‘trust comes first, but of course after you got enough material to know you can trust the man’.
Anyway, I do think there are a few honest sites out there, you shouldnt take big risks investing, but if you do, simply make sure you get it back when you ask..
“What if you are a 21-year old student that doesn’t want to take a loan at the bank because most likely they wont give it because he doesnt have an income, and secondly, because he doesnt want to due to tax involvement reasons..”
I just want to add on to what Steven has said. Do you think a bank would loan us any money if you tell them that you need it to speculate/invest on forex, stocks/options trading, sports betting and such? Not likely.
Therefore, I think for those legitimate programs out there, there is room for some individuals to obtain “loans” from interested parties. Of course, these programs needs to offer better or higher interest rates than banks. Otherwise, I might as well put my money in the bank or invest them in some mutual funds/bonds.
I am recently following a new strategy from scammers that surprised me a lot.
They show you real trading, real documents and telephone verified and so on. I am the third party of a program like this.
But when the program is running for some months he email his members telling that he must close the program and you will receive your money partially in some months with bad excuses.
So, he is making profit with your funds and you are not receiving your profit monthly: only a part of your deposit each month!!
A new form of fraud?
What can you do in this situation?. If you take part with lawyers you will receive only a part of your deposit and nothing is sure due to a disclaimer section.
I know some program who is trying to do this fraud to many members now, I am not going to post it here because I have sent an email to this Admin with a term to return the money of the members or all members will receive his documents and the necessary information. But after this term I will post in my Blog, and here (if Jude let me to do it) about it.
Any suggestions?
Two questions come to my mind:
1) How is he scamming if he’s giving the money back?
2) If he ISN’T giving money back, then it’s not a new form of the scam: I have seen many programs in past, when they reach the pyramid limit, they close the program and disappear without the word, either they email their members they will get their money back in time.
Hello Max,
don’t you consider a fraud returning the real money of members slowly?. For example 5% monthly.
It means that if I deposit $5000 I will not make profit with my money in 20 months!! and not only that, it means that I have to wait more than a year to receive my money without a valid proof.
That’s why I said that it seems a new scammer strategy. Yes, you can receive your money but he is making profit with it and your money is not refunded in a valid period.
So, what if I am a real trader and show these proofs to all members and then after 2 months I trade with their money without giving them the promised profit with excuses?. It’s like a loan.
I’ve got all their money and I am making profit to myself and from that profit I am returning the deposit little by little…
“Do you think a bank would loan us any money if you tell them that you need it to speculate/invest on forex, stocks/options trading, sports betting and such? Not likely.”
Yes, here in Spain I can receive a loan from a bank without questions.
“Even if a forex trader can make 10% monthly ROI consistent, why on Earth will they share this profit with you? They can lend money from bank or from private lending house paying 10 TIMES LESS interest”
Because a forex trader can make a good profit with thousands of dollars from other people without lending money from bank and without paying a high fee to this bank. And of course with digital money and some more transparency.
In some countries (as Spain) you must pay annually less taxes if this money is from trading than if you get that money from an individual job.
Hyipers are getting smarter. They follow the advise of some reliable bloggers.
At first scammers had hired their own bloggers or blogged theirself but recently there are some honest bloggers(like Jude and Richard) that refuse to work with scammers no matter how much they would be paid. These bloggers agressively turn down scams that cant show real trading proof(preferably by remote access) and dont reveal their name and physical addresses. Scammers tried to fake documents but bloggers arent stupid. They are fooled at first(last year) but they improof quickly. So now the scammers have to show some real trading proofs or they will simply be ditched by the hyip world earning peanuts. So they are forced to work harder for their money. They need to hire a fraud trader or they need to practice and learn trading for real. In the future scammers will indeed trade for real, but they will still steal your money. Its simply a new tactic to steal your money, they are just forced to evolve with the future. Thats why I like transparency. Programs that never lock any money and allow you to withdraw your initial or less likely to scam especially when they are running for many many months.(Like infinityshares).
@JoseLeon:
Hi Jose! I see now what you mean; yes, this seems to be clever scamming…
@makila:
Hi Makila! What’s the Richard’s blog that you’ve mentioned?
Since we’re talking about scams, has any of you had experience with perfect-forex.com? They also have original scamming method:
They have a bunch of monitors buttons saying “paying”.
But they only pay to monitors, not to other users!!!
Plus, they post bunch of false good votes on those monitors!
I tried to stop them by posting bad votes on each and every monitor they are listed at, but I can’t compete with dozens of good votes by their network!
Regards
Max
Did I say Richard? I mean Tony doh. I must have been sleepy
Actually there are quite a few good bloggers that try their best to be honest at reporting. None that I know take payments or associate themselves with an administrator, unless they become one themselves.
In addition to Jude, Tony, the rest of the bloggers here, there is Dolphin, Leo, Curt, Chris, Jose, SurfBloodHound, Surf Ads Inc. These are just a few that I could think of off the top of my head! If there are bloggers that affiliate directly with programs, they are in the minority.
Monitors on the other hand routinely invest in most program, so they can report paying or not paying. Programs know that it is worth the price to have a paying status on monitors, so even if they aren’t affiliated directly with monitors, they are indirectly associated by paying them first. In addition, I’ve heard rumors that sites like ASA takes a payment for reviewing a program positively. They call it a fee for premium advertising, but to me it sounds like an unholy alliance.
JMO,
Sharon
Hmm Bobby, are you talking about the new Google TiSP?
i want more info on the hyip they really pays? i want to join the hyip im from india, so im looking for your help to join the best hyip.
AdSurfDaily is not a HYIP but a program that is paying. Don’t take my words for granted though. Keep you informed as much as you can and make your own decisions…
The link here: http://hyipblog.nobshyip.net/2008/05/18/adsurfdaily-cashgenerator/