Warning Signs

Hi everyone! I guess it's often believed that whoever has the right knowledge rules the world. I don't know about that, but it will certainly give you an edge over other investors, maybe even admins, as for as the HYIP industry is concerned. So the theme for today’s discussion is what might give you some indication or a warning sign of imminent problems, particularly with some of the examples I want to offer here in bigger, longer term HYIPs. I'll start with something that hasn't been seen for a while now – HYIP debit cards. From previous experience it’s well known that online HYIPs which try to issue their own debit cards usually didn’t survive for too long afterwards. Simply because they can not provide you with the promised card and use it as an excuse to collect more money before leaving. It was just remembering a few of the big programs that tried to pull this trick over the years got me thinking that some of the tricks using by admins before their programs collapse would be a nice topic for today's discussion.

So as I already said the announcement of a debit card would be a sign of pending closure as proven by, well, just about every HYIP that ever offered it. All of them promised it, in some cases actually gladly collected money for it, but in 100% of cases failed to deliver it.

Another typical sign of a coming closure would be the admin announcing the future closure of the program to new deposits (temporarily or permanently) and therefore creating in the investors’ minds a much needed sense of urgency widely used in regular offline marketing as well. So imagine a program is running for 12 months and you quite like its fast payouts and professional support. The admin is also pretty active and built up quite a nice rapport with his audience. Some investors are even suspecting that the program has its own source of income, blissfully unaware that it is more likely just a very well organized ponzi-game.

So one fine day, when everything seems to be great as usual the admin suddenly announces that the program reached its goal of 5,000 members and deposits exceed the limit of what they need for the development of their business (the wording can be different and depends on the situation but I guess you got the drift). So unfortunately he had to close the program to new deposits on a particular day (say the first of January) and from that day on new members will not be admitted for some time. Of course, that creates a sense of panic among investors who think “I made so much money from that program and now it’s going to close. I have to make sure and deposit more money before the closing date, otherwise I will stop earning”. Therefore, many people lose their heads and re-deposit all their existing profits (or even invest more money than they earned from the program) back into a pending scam. So that leaves the admin with a nice chunk of money by the first of January and he spends his winter in some Caribbean resort while the investors get scammed. Some programs can even open and close their doors many times before disappearing or create a different tactic. But the result will be the same – after some struggling and the inevitable payout issues the program closes and the admin opens a new HYIP from the money “earned” in the previous one. The cycle repeats itself over and over again.

A very popular excuse, and occasionally a genuine reason, for a program’s closure could be the blocking of payment processor accounts. Mostly I'm referring to Payza here, and to a lesser extent (as it's currently less widely used) SolidTrustPay. The blocking of a Payza account can only lead to the program’s closure and unless the admin has another account there and continues paying using the reserves the collapse (especially if it’s a short-term program) will be imminent. Generally speaking however if there ever is a problem with Payza/STP accounts it would mean the program's admin has been accused or investigated for fraudulent activity, so account suspension is usually the result of a problem not yet seen by investors, not the cause of it. Of course, if a member uses Payza or STP they have a bigger chance of getting refunded after a scam, but that’s not the issue we are talking about today.

Perhaps the most common trick to scam a little extra cash before closing (which doesn’t really work on the more experienced investors) is the introduction of new higher paying plans and some strangely high bonuses for larger investors. Usually (not always) that means that the admin didn’t get such good results as first expected from the existing plans. So in a final attempt to collect more money it takes this step in hope that many investors will take this opportunity to deposit into higher paying plans or get some bonus. Well, I guess it works on some folks as otherwise the admins wouldn’t be doing it. The question to consider: would a program change their plans to apparently more profitable ones and offer some bonuses if everything was running smoothly. Of course not. A well thought-out and organized program with a smart admin has a strategy of continuous development for many months ahead and surely will not make any drastic changes that would alert experienced investors that something suspicious is going on. Sometimes though (pretty rarely) the more attractive and profitable plans can boost many deposits and prolong the ponzi’s lifetime but it happens very seldom so we can single that out because it’s always better to be safe than sorry in this industry.

There are many other ways of getting some more money before closing the program and some of them more obvious while others are less so. There will be always many ways in which admins will try to fool investors and take a big bite out of your money. But whatever happens please always analyze and see the real motives of their actions and not the ones he wants you to believe. And please share more tricks from your experience with HYIPs either to my e-mail or on the MNO ShoutBox. I’m sure that many admins can be really inventive when it comes to luring investors into their quickly collapsing programs.

I believe that MNO readers openly discussing these things there will be less and less room for dishonest admins, monitors, bloggers, and ref sharks who do whatever possible to persuade you that the money is being made from ForEx, betting, stocks and shares, and not from the ponzi schemes which are usually just a matter of redistributing existing money and nothing else. And if you are playing those games please be aware about the possibility of gaining and losing money and never trust any of the admins who can be pretty shrewd when it comes to parting you from your money. Be smart and be on the safe side and remember that everybody in this industry has their own agenda and your task is to find it.

If you would like to share your thoughts on any of that then please feel free to leave a comment to this article, contact me directly at my e-mail address, or share your thoughts on the MNO ShoutBox. Please also tell me what other discussions you would like to hear in the coming weeks. I think it will be a perfect place to hear what others are saying while gaining some real and practical experience which is much needed if you want to become a successful player in the HYIP industry.