Many participants hope to hit the jackpot before the scam collapses
In 2023, the number of financial pyramids, the creators of which deceive ordinary investors, has almost doubled. According to the Central Bank, the total number of financial schemes involving illegal brokers and lenders has increased to record levels. Investors do not pay attention to numerous warnings about dubious schemes from the Central Bank and financial experts, but count on the record profits that modern pyramids promise to bring them. According to the candidate of economic sciences, analyst Mikhail Belyaev, the incompetence of ordinary people, as in the nineties, allows dishonest businessmen to earn huge sums, taking advantage of the gullibility of the population.
The total number of illegal financial schemes, including so-called money pyramids, according to the Central Bank, in 2023 increased by 15.5% – to 5,735 organizations. The number of identified illegal lenders increased by 9% over 12 months. According to the Bank of Russia, from January to December 2023, more than 11.2 thousand illegal Internet resources were blocked, including accounts, channels and chatbots of popular social networks. It would seem that the dashing 90s are no longer in the yard and the times of Sergei Mavrodi and his like-minded pyramid builders should have long since sunk into oblivion. But, as it turns out, his case is still alive today. We asked Mikhail Belyaev to comment on this phenomenon.
– Financial literacy is now studied almost from the elementary grades of school. Nevertheless, Russians continue to naively believe in miracles and dutifully give their money to modern pyramid builders?
– Not in miracles, but in the same fairy tales: about a treasure, a “golden fish” or a field of miracles. But fairy tales remain fairy tales and do not come true in life. You must immediately understand that a financial pyramid is a type of fraudulent scheme in which its founders usually do not have their own financial resources, but cover obligations to investors with money from new investors. In the 1990s, this scheme worked perfectly. The founder of MMM, the well-known Sergei Mavrodi, earned billions from such fraudulent games and was even planning to run for president of the country.
– Has the pyramid scheme changed now?
– Not at all. Only the methods of delivering information have changed. In the 1990s, information was delivered in letters packaged in newspaper boxes, and now a similar process is carried out using social networks and online messages.
– Doesn’t this prevent speculation?
– About 4% of consumers, both in Russia and in the West, take this bait. Answers phone calls and written promises. Moreover, they bring small things to the elderly – for example, beads. At the same time, they say that creating certain textured ornaments from these beads, which cost nothing, will bring serious profit. People are forced to pay for the raw material, but the final product goes to the distributor. This is also another financial pyramid.
– How to protect yourself from scammers’ tricks?
– There are several possibilities. The main thing is not to trust deceivers. Fraudsters will always press where it hurts: if you tell them about your loneliness or health problems, they will immediately make new offers, such as “free medicines” or some kind of discount on utilities. In any case, such “cheese” will not be free. You will have to pay either by square meters or by the entire apartment.
– But probably many participants in the pyramids do this deliberately – in the hope of hitting the jackpot before the pyramid collapses…
– We must be clearly aware: those who are now offering ordinary investors a good income – at the level of 200-500% per year – are scammers. Financial pyramids have collapsed. Firstly, when the funds of the first investors are no longer enough to pay dividends for the second buyers of these “securities”. Secondly, when the creators of a business realize that they have already earned a decent financial amount, which will be enough for them personally for many years of carefree existence. Thirdly, when law enforcement agencies come and close the shop.