This presentation gives a short and simple description of the Ponzi Scheme and the ways to prevent such frauds.

1. PONZI SCHEME
A Simple Explanation of Basic Concepts

2. Definition
A Ponzi Scheme is a fraudulent investment
scam that pays returns to investors from their
own money or from money paid in from
subsequent investors – rather than from profit it
actually makes

3. Working of a Ponzi Scheme
1 | A Fraudster Places an advertisement for a non-existent
investment that offers extra-ordinary returns in a short
time
After receiving the promised returns on their investment,
the first investor starts to spread the word to family and
friends. The scheme gains credibility
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3 | Because there is no actual investment vehicle, there are
no profit. The first investor is paid from the money of the
other investors

4. Working of a Ponzi Scheme
5 | Unfortunately, because Ponzi Schemes are unauthorized
and make no profits, you are very unlikely to recover
any lost investment.
Typically the fraudster will vanish with investors money
or the scheme will collapse as investors realize that they
are not receiving the returns they were promised
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7 | Because of non-regulation of investment market, these
frauds become rich and the investors poor

5. How to Recognize a Ponzi Scheme
1. If you are considering any type of investment, always remember,
if its too good to be true, it probably is. High returns can only be
achieved with high risk.
2. Ponzi fraudster use vague technical jargon to describe their non-existent
investments.
3. The bankers will try to pressurize you. Take decisions with
patience and only after checking through all the documents.
4. Resolve any suspicions you might have about the scheme’s
authenticity by investigating the company status and contact
details.

6. Steps to be taken by Victims
1. FSA (Financial Services Authorities) regulates companies that
offer investments to public.
2. Call FSA Helpline Number, 0300 500 5000
3. If you have given your bank account details to any such
investment company, immediately contact the bank and
deactivate your account.
4. Every decision you make in any scheme, make sure you have
written and signed communication with you. Make copies of the
same and keep them with you.
5. Spread about such frauds among other people and friends.
AND THE MOST IMPORTANT
ACT SMART AND PREVENT SUCH FRAUD ACTIVITIES