Don't be fooled by the promise of high returns, stay away from Ponzi schemes

"Spend and get your money back. Make your spending a new form of investment with 100% rebate."

"Buy and sell to get fixed returns of 4% each day. Earn over 10,000 a month."

"Invest $200 and get 5 times the return. Enjoy the benefits of the sharing economy with a caring team."

"Enzyme drink that can cure cancer. Spread wellness and earn bonuses at the same time."

...

Have you seen any of the above before? If you have, then remember not to let your guard down. There are words that are commonly used by Ponzi schemes. To keep your funds and account safe, read the following carefully.

Recently, the WeChat teams have been receiving reports of certain individuals using their personal WeChat accounts to engage in Ponzi schemes and other illegal activities.

We would like to remind everyone to keep your eyes open and stay away from such scammers to prevent any losses.

What is a Ponzi scheme?

Ponzi scheme is a kind of money fraud. Under the guise of different businesses and projects, scammers concoct different investment schemes that promise high returns to lure unknowing victims into participating in them. The so-called returns are not actually profits from investment activities, but the funds from new investors. Once the stream of new investors stops, the previous investors will no longer get any returns for their investments.

From the start, the aim of a Ponzi scheme is to amass as much funds and assets as it can until new investors or new funds dry up. Then, the leader or organizer of the platform or project will abruptly cease operation or close the project and run away with the money.

Despite what investors may believe, there is no real investment projects involved. Scammers may create online shops, apps or mini programs and ask users to register an account to get free points (or contributions, privileges and other virtual assets) and become a member or agent that will entitle them to top-up, spending, order and other rebates.

Almost all Ponzi schemes use high returns as the premise to catch people's attention, e.g. spend $1,000 to get $1,200 cash rebate.

They show fake proof of high returns in forums and livestream sessions to attract more investors to participate in the scheme, and encourage investors to ask their friends to join in by giving them cash incentives for bringing in new members or funds. The funds from new investors will then be used to pay for the returns and bonuses that the scammers have promised to the old investors.

When the cash flow from new investors can no longer support the operation of the scheme, the scammers will use different excuses to prevent investors from withdrawing their assets, such as system maintenance or account restrictions imposed by WeChat. In the worst case scenario, they may disappear totally. Investors will no longer be able to find the scammers and cannot get back their money.

Characteristics of a Ponzi Scheme

Ultra-high returns that far exceed normal expectations
An "invest more, earn more" model that promises static returns (higher rebates for higher holdings) or dynamic returns (greater bonuses for more new users recruited)
Use of groups + "fans" to promote false information

WeChat has zero tolerence for Ponzi schemes which are not only illegal, but also pose a great threat to the well-being and financial security of our users. We will take the necessary actions on any accounts found to engage in suspicious activities in accordance with the WeChat Community Guidelines, WeChat Terms of Service, WeChat Acceptable Use Policy and other relevant agreements and standards.

▶ WeChat accounts used to engage in fraudulent activities will face login and function restrictions.

▶ WeChat groups involved in fraudulent activities will be closed.

▶ In regards of accounts used by scammers, WeChat will cooperate with the public security authority and submit any found evidence and clues to the law enforcement for further investigations.

(Scammers include, but are not limited to, those who started scam chat groups and those who have repeatedly added users to such chat groups.)

If you suspect any illegal activity, report it to us immediately using the WeChat app and take legal action to protect your rights and interests.

At the same time, we advice you to leave any scam chat groups or add the scammer to your blacklist. Stay updated with the latest news and information so that you will not fall prey to such attempts in the future.