What are HYIPs

HYIPs is short for a high-yield investment program. These types of programs are more commonly called Ponzi schemes. This kind of scam offers investors an extremely high return on the money they invest, but instead of getting the original investors money earned from actual profit, they pay previous investors with the money invested by new investors.

History of the Ponzi scheme

The Ponzi scheme was invented by an Italian con man named Charles Ponzi in the early 1920s. Mr. Ponzi would promise investors a 50 percent profit in the first 45 days of investing, and a 100 percent profit within 90 days of the original investment. Investors would buy discounted postal coupon booklets in other countries and redeem them for full value in the United States. The reality of the scheme was Charles Ponzi was merely paying the older investors with the new investor’s money. This system ran for over a year and ended up costing his many investors over 20 million dollars. This scheme has been run several times since with the added help of digital currency and the ability to reach more people over the internet.

Recent HYIP Schemes

Zeek Rewards. Zeek Rewards was a scheme that ran in 2002. This site ran as an investment opportunity for people to invest in. Those individuals who bought in were supposed to receive shares in the profits from the penny auction site Zeekler. Investors were encouraged to recruit other investors, with the promise of additional money if they brought more people in and those people invested as well. There was also a subscription fee that ranged from $10 to $99 per investor. Zeek Rewards was said to be the largest Ponzi scheme in history, totaling over $600 million dollars, and affecting over a million investors.

PIPS PIPS was a system that ran in 2004 and by the time people caught on, it was running in over 20 different countries and had millions of investors. PIPS could stand for two different names depending who you asked, and they were either People in Profit System or Pure Investments. The Bank Negara Malaysia finally investigated in 2005 and charged the founder or PIPS and his wife to over 90 counts of money laundering and fined them over 20 million dollars for their actions.

OSGold OSGold was founded in 2001 as an e-gold imitator company. This company folded in 2002, and at the time it had over 60,000 active accounts that were promising investors high-yield returns of 45 percent a month. OSGold may have cheated investors out of as much as 200 to 250 million dollars.

HYIPs or Ponzi schemes live by the old saying that if it is to good to be true, it probably is. People should exercise extreme caution when they are offered a deal with extremely high returns.

So, having said that, there are chances to make some ROI with HYIPs – use a good monitor site like HYIP Monitor to check if a the program is a scheme, or actually paying out the returns. Otherwise stick to other investment methods – check the subreddit personalfinance for more tips and guides.