New figures show Londoners lost essentially the most from pyramid scheme scams last yr, with greater than £1.2m (£1,292,540.74) lost per 100,000 people. This is 13 times greater than neighboring Essex, which lost £92,941 per 100,000 inhabitants.
Despite the best losses on account of pyramid scams, London had the bottom reporting rate. There were only 8.03 reports per 100,000 people. This is sort of 4 times fewer than within the Welsh region of Gwent, which showed a mean of 28.36 calls per 100,000 inhabitants.
Wales also had the fewest overall reports, just 2 reports per 100,000 population.
What is a financial pyramid?
According to Investopedia, a pyramid scheme is “a dishonest and unsustainable investment offer that relies on promising unrealistic returns on imaginary investments.” It’s called a pyramid due to the several levels in the corporate, with money flowing down the pyramid, benefiting those on the “top” greater than those on the “bottom”
For example, early investors in an organization will receive large returns, leading them to recommend this system to others. Returns are paid for by latest money pouring in from latest recruits who could have difficulty recruiting others and earning money.
Pyramids may or may not involve selling products. However, in all pyramid schemes, selling the product is way less vital than attracting latest investors.
areas that lost essentially the most in 2022
Areas that lost the least in 2022
Avoiding pyramid scams
- Does it seem too good to be true? It probably is! If someone offers you huge sums of cash every month or says you possibly can earn 1000’s along with your day job, it is advisable to reconsider your commitment.
- If the upfront costs are huge, it might be a scam. Remember that you must not pay to become profitable! Many pyramid schemes will ask you to pay to your products to then sell them at a better cost. On average, only 10% of individuals profit from these programs.
- The products sold are expensive and of low quality. In this case, it might be a canopy for a scam to make the corporate appear more legitimate. The products can even be harder to sell, which suggests you could lose money.
- If you think you may have been scammed please contact Action Fraud or your local police authority.
Have you been a victim of a pyramid scheme scam? We wish to hear from you! Leave a comment below or send an email to isobel@moneymagpie.com.
