Marketing, Motherhood, and Mayhem

There’s a sucker born every minute

July 30th, 2010 by Deb McLean

I just read on CBS Money Watch that Federal investment regulators have issued a warning  about a sophisticated and fast-growing scam that trolls social networks for victims.  They use ads on Facebook to lure initial victims, who then convince their friends to participate in these so-called “high-yield investment programs”. 

Apparently, these “HYIPs” use an array of websites and social media –including YouTube, Twitter and Facebook. It’s the typical pitch that I pray you are all too smart to fall for:  Invest in safe securities that pay high yields through a supposedly “guaranteed” program that pays “interest” as often as once a week.   Come on gang, these programs are obviously Ponzi schemes that do nothing more than pay old investors with the money brought in from new investors.

Unfortunately, many of these are working because of the effectiveness of social media.  They are using Facebook and Twitter to attract youthful and unsophisticated victims, who are then encouraged to recommend the investments to their friends in return for a referral fee.    

It’s no different than the folks who fall for the same pitch in radio, TV, newspaper ads or by attending “get rich” seminars.  Scams have been going on since human beings could communicate.  If it sounds too good to be true, it probably is.  Let’s not blame the social networks for the stupidity of some unsophisticated and gullible investors.

However, if you’re one of those unsophisticated and gullible investors and you think you’ve been scammed, report it to the FINRA Investor Complaint Center online or call them at 1-866-963-4672.

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