Pyramid schemes from times past until today are still rearing their ugly head
Last updated: Oct 14, 2016



What is a Pyramid Scheme?

  • An illegal investment scheme
  • Starts with 1 person (founder/director/scum) at the top who recruits people who in turn recruit more people
  • Earliest investors typically make money (depending on how “convincing” they are) while those on the bottom of the pyramid are, well, wiped-out


  • Very similar to a Ponzi scheme named after the (in)famous Charles Ponzi except that the structure may not necessarily be pyramid shaped
  • MLMs may not be pyramid schemes – However, unfortunately, many of them are


Famous Pyramid (and Ponzi Schemes)

  • Genneva “gold” Malaysia & Singapore (2012)
  • Bernard “Bernie” Madoff (2008)
  • SwissCash / Swiss Mutual Fund (2006)


Red Flags to Watch Out for

  1. High guaranteed returns (20%?! impossibru!)
    Guarantees are only as good as the company or organization that guarantees them. Guess what happens to guaranteed returns when the company no longer exists…
  2. Business models that focus on recruitment (or involves many circles, squares or legs)
  3. Product(s) or investment is not available anywhere else and/or the price is highly inflated
  4. Selling which involves high-pressure, gents in fancy coats & ladies in expensive dresses, expensive luxury cars, datuks/datins, & obsessing on finding your red hot button
  5. Vague explanation on how profits are made (and without black & white verified details)




Before You Jeopardize Your (and others) Hard-earned Money

  1. Google scam _insert-company-name_ & check out BNM’s financial alert list
  2. Unlicensed as an investment & with (shell) companies incorporated in far away distant exotic countries
  3. Last but not least, check your guts if it’s telling you that it’s too good to be true & greed starts clouding one’s judgment


Latest Scam Trends

  1. Blogs/sites that are put up by scammers themselves to try to convince that they are not scams
  2. Closing the scam & relaunching it again with a new name (rinse-and-repeat)
  3. Trends: forex, household products marketing, money laundering, identity theft, credit repair


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