The recession currently faced by country has forced many people come up with all sorts of dubious ideas on how to make easy money by preying on people's fears, insecurity and greed.

We ve been inundated with several get rich schemes in naija like MMM, ultimate-recycles, chin chin and eubao. These schemes promise high returns for people who invest in them.

A ponzi scheme is a dubious investment scheme where the operator rewards its investors with funds obtained from newer investors.

Unlike other business models that pay returns out of profit from real economic activities, the operators of the ponzi schemes like MMM and ultimate cyclers pay their members with fresh funds obtained from other members.

Deception is the tactics used by the ponzi operators. It is a form of multilevel marketing except that money is the product sold here.

Know their modus operandi so that you dont loose your hard earned cash.


1. Promise of high returns : Operators can promise over 100% return on investment in a short time say 1 month.

2. Very little effort i needed : Just recruit 1 or 2 persons and you re done.

3. Operators use popular figure heads to make the scams look legitimate. e.g pastors, professors, celebrities.

4. Use psychology to earn your trust: coax you , cajole you , play on your desperation, insecurity and greed.

5. Pressure members to recruit new members [/b]as the business relies on inflow of new funds.

6. [b]Organize phony trainings to keep people hooked to the scheme

7. Have vague and complex [/b]rules which are changed on short notice.

8 [b]Difficult to pin point the organizers this makes it easy for them to disappear when they ve met their target of funds.

9 Organizers surround themselves with security to intimidate other members and secure themselves.

10 Members share similar characteristics : They live in the same community, think alike, usually less informed, gullible and greedy.


Summary

Like all ponzi schemes the main benefactors are those who enter the scheme early and leave early , because people will eventually know that the scheme is false when they re unable to get their returns this when this happens know that the scheme is coming to an end.

The classic systems failure, website failure, network failure is often used to buy time while the operators plot their exit strategy.

Be warned, its all about your cash and not you financial well being. Cut your losses and run.