Like to get started on an internet business but you're afraid of being scammed? Or do you wish to know the different methods by which fraudsters use to rip people off their money? If you have a misconception that everything done online is a scam, well stay put because I will explain what you need to know about these scams

The internet has the crown as man’s greatest creation. It has aided in digitalizing our daily activities; from information sharing to connecting with, friends, families and others around the world. From 2010. The use of the internet to establish a business has been very rampant, so much so that nearly all major companies around the world today have an online brand. This has helped in connecting with more clients, opportunity seekers as well as customers. Unfortunately, everything that has good also has its bad

Internet Business Scams
The internet has made a lot of individual millionaires today, establishing a brand on the internet and promoting your skills is a quick way to go from grass to grace in a few years. Unfortunately, as many as they may be, legally making money online, there are still as many who exploit the common man for their selfish purposes

The majority of these fraudsters have not been brought to the book, but more people are falling for their schemes. Unfortunately, in a country like Nigeria, such criminals are caught and set free because they have paid for it, hence justice is not served to their victims. As such, they settle for a lot less than they deserve.

Here are the main types of scams and how to avoid them;

You will want to note that these scams are not limited to the internet alone, they started operating as a firm we see daily. As time went on, they upped their game by swindling unsuspecting individuals on the internet.

Ponzi Scheme
An industry that has refused to die since the year it came to life in 1920. The Ponzi scheme was named after a man called Charles Ponzi, an Italian immigrant who migrated to the United States in 1880. He was a businessman who tricked people into buying cheap postal reply coupons from overseas, promising them huge returns. His investment fraud operation costs his clients over $ 20 million. At that time, that was the biggest scam in U.S history.

Though today, the Ponzi scheme is associated with Bernie Madoff, the mastermind behind the greatest investment fraud operation the U.S history. The scheme robbed up to $50 billion from wealthy individuals as well as a charitable organizations, universities and publicly traded banks. In 2009, he got a sentence of 150 years in prison.

How does it work?

Let’s assume that Mr A has a capital of N25,000, thinking of how to multiply it by three folds in the shortest time possible without much stress or work The next thought that enters his mind is investing the money. He looks for an expert in the field of investment, in other words, a certified investor that will give guidelines on what to do. This investor (a Ponzi schemer) now explains how an investment works and tells him that he has an investment company, telling him how the lives of individuals have changed through their company and convincing him to invest in their firm.

Mr A agrees to invest his money, expecting his ROI in the next two months. It is time for Mr A to get his investment and profit, so he meets up with the investor and asks for his money. The investor gives him his money, with an interest of N50,000 and Mr A, is pleased with the outcome. A satisfied Mr A told his friends about the investment firm and showed his result. His friends meet with this investor and invest their money as well. At the stipulated time, they get their profit and their happiness.

Despite the great return, the fact is that there is no money invested. Assuming an old investor has come to claim his investment, the investor takes part of the money from the new investor and uses it as part of the return to the older one. In other words, money is redistributed from new to old investors. Hence this forms a cycle in which the customers are satisfied with their earnings and the Ponzi schemer earns a reputation for himself.

This pattern continues until the investors stop getting customers, or rather when the new clients are not enough to satisfy the demands of the old ones. Then the Ponzi schemer claims the remains of the investment. The system crashes.



Pyramid Scheme
People tend to make the mistake of taking pyramid schemes for Ponzi schemes. A pyramid scheme is a fraudulent system of making money based on recruiting an ever-increasing number of investors. The initial promoters recruit investors, which recruit more investors as well, and so on. The scheme is called a pyramid because at each level, the number of investors increases

How Does it Work?

It starts with one investor recruiting other investors by promising them high returns (just for illustration, we will use two investors, although, by default, four investors are compelled). The new set of investors (the first two) make payments to the first investor in exchange for the ability to recruit more investors. Now, these two investors go on to recruit two investors each, and make the same promises to these unsuspecting individuals, selling them the idea of making so much money with a small investment and recruiting two people.

These new individuals pay the investors for power to also recruit more people. Meanwhile, the investors pay a certain percentage to the investor who recruited them from their earnings. So, when the recruits get two clients each, get the money, they pay their immediate boss a certain percentage, their boss still divides the money and pays the investor at the top.

The process is repeated and the pyramid grows larger and larger. However, the larger the pyramid the smaller the returns, so once people stop investing, only the early birds on the pyramid gain, thus leaving those at the bottom with big losses.

The processes involved in a pyramid scheme are not as complex as that of a Ponzi scheme. But either way, these are the schemes we find on the web today.

Internet Fraudsters
The list will not be complete if we exempt these fraudsters from the list. In Nigeria, the group is more popular than the two mentioned above. Unlike the first group of individuals in ponzis and pyramid schemes that benefit from it, this group is just a loss to their clients regardless of being first or last. The main aim of these people is to swindle every cash left in a person's account. (Been a victim twice, so I know how it feels)



How they operate

They have several ways of operating but the most common method they use is they come in under the disguise of an investment company with their claim of multiplying your money as fast as 45mins. As vulnerable Nigerians who want to make money as soon as possible, the idea of quick cash-out is bought and our thinking is diminished. Unsuspecting individuals click the link provided to anyone interested, landing on Whatsapp. Some pass from a landing page or website to Whatsapp. They are welcomed in a professional and dignifying manner, so much that it clears your doubt. They ask for details such as name, number, and email address so they can fill a form for you before they move to the main business of the day.

Once they have gotten the details, they give their target(s) the offers example N50,000 for N150,000. Usually, the minimum amount is N50,000 (most of them), but they can compromise if you have around N40,000 to N45,000. When the targets show sceptical signs, they send testimonials of people who have benefited from the investment. But in reality, those are just designs created by their allies to deceive them (victims)

These unsuspecting individuals are immediately convinced when they see the ungodly sums made by the supposed benefactors who took the risk. They are also key to the factor of using money to make money. Then the person is convinced and makes the deposit, or rather the investment. Once it's done, they send their victim(s) a screenshot of the processing information and ask that they wait for at least 45 minutes. An excited victim tries to connect with them 45mins later or sometimes an hour later, but the Whatsapp contact and line do not exist anymore.

The sad thing is that victims try not to lose hope but when they realize that they are victims of the scam, they break down. These fraudsters are the worst, be vigilant!!!



Main Features Of These Scams
They operate differently but the features that make them similar are

1) Mouth-watering Offers that are too good to be true &
2) They convince you to invest in an abstract idea of getting so much for doing nothing as quickly as possible

Conclusion
Yes, you indeed use the money to make money. Also true that investing your money into a business that will enhance your life is a form of investing in yourself. However, whatever you invest in, make sure it is not a get-rich-quick scheme thinking you will be an overnight success without doing anything. It takes at least 5yrs to be an overnight success so invest your money and work. If you intend to make money online, choose a digital marketing skill that will pay you in the long term. The likes of affiliate marketing, copywriting, freelancing, social media ads creator, and Amazon KDP are just a few that you could dive into.

Do you wish to learn any of these?
Use the number in my signature to connect with me

PS: Referral and daily tasks websites are for short term earnings, at least for the early birds that put their money into it