Agency for Regulation and Development of the Financial Market warns that participation in financial pyramids can entail a complete loss of invested funds. Such schemes are often presented as reliable investment proposals but in practice they are not financially stable and violate the laws.

Key signs of a financial pyramid:

• Inflated promises of profitability. Income that is many times higher than market indicators is most often generated not through real activity but through funds of new participants.
• Mandatory attraction of new investors. Profit is paid due to a constant influx of new funds, without which the scheme quickly ceases to operate.
• Lack of a license. Participants are not provided with information about availability of a license issued by the Agency. The agreement may lack a legal liability for safety of investments.
• Active advertisement on social networks and instant Presentations, gifts, persistent calls for payment in cash or via e-wallets, bypassing official payment instruments, are often used.
• Use of misleading names. Fraudsters can use names such as "innovative project", "financial center", "debt program" to create appearance of legal activities.
• Initial investments are small. This is done to build trust and subsequent involvement in larger investments.

If you suspect that you have become a victim of a financial pyramid, you must contact the police and the Financial Monitoring Agency (AFM) as soon as possible. It is recommended to file a statement without delay – this increases the likelihood of a refund. It is also important to you’re your relatives, friends and acquaintances so that they do not become next victims.

Check information about the company, availability of a license and registration on the official websites of government agencies.

More useful materials are available on the Fingramota.kz website.

External Communications Directorate

press@finreg.kz

Source : https://www.gov.kz/memleket/entities/ardfm/press/news/details/1027618?lang=kk