Scam: what is it and how to predict it?

Scam is the nightmare of any online investor. The meaning of this word is not known to every ordinary citizen, but everyone who invests their capital for the sake of profit is surely considered with it.

What is scam and under what conditions does it occur? We will find answers to these and other questions in this excursion.

What is scam? Translation and interpretation of the concepts of scam, scammer, scamming

Scam is a planned bankruptcy of a financial company, in other words, a scam (scam translation wiktionary). Translation of the word scammer - fraudster. Translation scamming - fraud.

It should be understood that the legend of bankruptcy or the loss of a significant proportion of depositors' funds can be real or invented. In any case, investors are unlikely to get their money back.

It is almost impossible to find out whether bankruptcy was planned or not, therefore, in most cases, online scam means any bankruptcy of a financial company.

If a company declares that a significant part of its investment capital has been lost as a result of a wide variety of events, then we have a scam in its traditional form.

It often happens that the top management of an investment company deliberately creates the conditions for officially declaring bankruptcy. Responsibility does not fall on the shoulders of a particular person, the company closes and managers or administrators (if this is a HYIP project) take all the capital invested by investors.

Unfortunately, the scam resulting from such events is not uncommon.

How scam occurs: common causes

To declare an investment company invalid - a great opportunity to formalize the procedure for its closure. In this case, you can count on getting funds from investors - the main idea of ​​scammers.

But how to achieve this?

There are several tried and tested schemes that declare scam and enrich with other people's money:

• Hacker activity. Hacking accounts of system participants and stealing their money is a plausible and very realistic situation. This scammers can use to their advantage: they simply report that the system has undergone a hacker attack and most of the money has been stolen.
• Incompetence manager. Often, the ephemeral cause of failure, as a result of which a scam occurs, may depend on one person. It becomes the managing financier or trader. Of course, the name of this perpetrator is not reported, but investors will find out that they have lost their money as a result of the "jamb" employee of the company.
• Irresponsibility of a financial partner. Why blacken your reputation if you can tarnish the name of others? And so many scammers do - they simply announce that their financial partners - banks, payment systems - have ceased to fulfill their obligations and do not pay money. The result is the same - investors do not get their money back, and the company's reputation is, in fact, clean.

How to predict scam? Signs of collapse

If you still want to make a significant profit for at least a small share of your investment portfolio and invest money in risky instruments (for example, HYIPs), then you need to know when to withdraw capital from circulation and fix income.

There are several signs, the presence of which allows you to define a scam in advance and withdraw your money:

• Increased technical problems with the site of the company. When the admin realizes that there will be a crash soon, he devotes less time to an online resource and does not spend money on maintaining it. It turns out that if recently the information on the site is being updated less and less often, failures arise, and it is likely that the project will be scam soon;
• The deterioration of the quality of the support service. This feature is related to the previous one and is based on similar assumptions. If the support service works much worse than before - be on your guard.
• Problems with the withdrawal of money. If a scam is coming, financial difficulties for investors are quite possible. When problems arise with the withdrawal of money from the system, you need to be especially wary and once again examine the system’s rules - funds can be withdrawn a little later than usual.
• Undue growth in profitability. Trying to attract additional investments, the company's management makes investment plans even more attractive. Having reached a significant inflow of capital, the company may cease to exist, thereby renouncing the need to pay profits.
• Company policy change. If an investment company takes a completely different course of development than before, then either it will be successful or it will go bankrupt. In any case, playing roulette is not worth it and you should think about how to withdraw capital, because scam project is likely.
• Expansion of the advertising campaign. When an organization launches new high-priced advertising, it is either preparing to collect the cream one last time and then retire from the market, or simply outperforms the competition. Match this feature with others regarding your chosen company and you will understand whether a scam is coming, or you are cooperating with a truly progressive company.
• Increase the number of negative reviews about the investment company. If more and more negative reviews have appeared about the company lately, this indicates that the quality of service in it is noticeably deteriorating. Consider to get your capital out of the company as soon as possible.
• Reduced site traffic. If customers or potential investors lose interest in an investment company, follow the same path. If this is a HYIP, then a scam will still arise sooner or later, because the funds will not flow into the accounts of the organization, and it will simply be nothing to pay unjustifiably high profits!

Scam: conclusions and my recommendations

So, if you are not the first day in the world of investing, then you may have already invested your money in projects that were later waiting for scams. We considered not only the main reasons for which the scam is announced, but also studied the signs of its occurrence.

It should be understood that these signs should be studied in a complex and it is not necessary to withdraw your investments when a couple of negative reviews about the company appear. But if the situation is aggravated and other signs become relevant - do not hesitate! It is better to lose part of the profit, but to save capital, and not wait until a scam occurs, than to be left with nothing at all.