Monday night's episode of e.tv soapie "Scandal" reminded viewers that they should be careful about where they invest their money.
Comboa is a fictional online company that was encouraging characters to "invest" their money while paying out impressive "returns". However, in last night's episode, the Comboa site crashed – and it looks as if it's turned out to be a fake get-rich-quick-scheme like the real-life Ponzi and MMM scams, which robbed ordinary people of their money. Coincidentally, e.tv also currently screens the drama "Easy Money", which deals with a similar scam.
If you want to avoid being in the same position, here is what you need to look out for:
1. Beware of the 'promoters'
In such schemes, recruiters are usually well-dressed, sporting expensive cars and generally very flashy. The trick is that they will eventually offer to help you get rich, "just like them". This is an offer that not many can resist, and they fall into the trap and "invest" – only to lose all their money.
2. There are never guaranteed returns on Investment
If someone tells you that the returns are definite or "guaranteed", run as fast as you can – because all investments carry some risk, and whoever you are working with should make them clear from the onset.
3. You aways have to invite a friend
Most of these scams involve you as an "investor" having to recruit more people. Usually, the more people you recruit, the more you will be rewarded by the scheme – because you are being paid from their "investments", while the scammers keep most of the money, and nothing is being invested in real financial products that pay real dividends.
The demand that you recruit more to "earn" more gives "investors" incentive to ask their friends and family to join, which is how these scams can devastate entire communities. When these operations fold, it is usually the last few tiers of "investors" who lose the most.