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2007-07-03 19:46:22 · 3 answers · asked by Jonathan L 1 in Business & Finance Investing

3 answers

A High Yield Investment Program, or HYIP, is a type of pyramid scheme normally offered via the Internet. HYIPs typically accept deposits as low as $1 while promising astoundingly high returns..
Online High Yield Invetment Program rarely last for the long term. Overwhelming number of cases suggest that HYIPs are Ponzi schemes, in which new investors provide the cash to pay a profit to existing investors, which they typically then withdraw. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme, known as compounding (because even higher profits are promised).

The introduction of e-currencies has made it possible for a High Yield Investment Program to operate on the internet and cross international boundaries, and to accept large numbers of small investments. A High Yield Investment Program usually accept deposits by either e-currency, like e-gold, e-bullion and INTGold, or use specialist third party payment processors like AlertPay, SolidTrustPay, CEPTrust, TriStarMoneyChangers and StormPay. HYIPs typically offer a significant incentive commission (for example, 9% of invested funds) for members to attract and refer new investors.

A High Yield Investmet Program discloses little or no detail about the underlying management, location, or other aspects of how money is to be invested, and relatively little information (other than asserting that they do various types of trading on various stock and other exchanges) on how they actually generate the returns they purport. They are sometimes presented with some form of an emotional appeal, appeals for faith, and promises that they will help investors achieve financial freedom.

2007-07-03 21:23:08 · answer #1 · answered by anthony s 2 · 0 0

100% unsafe.

It's a flat out scam. ANY business that promises a return this ridiculously high CANNOT be legit.

It's a Ponzi scheme - they offer incredibly high returns, and as more people join, they use their money to pay the early people, so that it "looks" like it's working. Before the inevitable collapse happens, the take all the money and vanish.

Richard

2007-07-03 19:53:09 · answer #2 · answered by rickinnocal 7 · 0 0

It's very risky. That's why it's called an HYIP - High Yield Investment Program. It's high-yield but it's also high-risk. If I were on you, I won't invest in them. It's only a matter of time before this ponzi scheme becomes a scam.

2007-07-03 22:17:49 · answer #3 · answered by Anonymous · 0 0

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