In the investment world in general, investors come to invest with the main goal of making a profit. However, there is a form of fraud in the investment world that needs to be avoided, namely “money games”.
Please note that money games are an illegal and dangerous form of investment that can harm many people. The money game itself is basically unsustainable. That is, money games depend on the constant recruitment of new participants to pay profits to old participants.
So, to better understand what a money game is, its characteristics, how to avoid it, and even how to ban businesses using this scheme, see the full review below.
What are Money Games?
The definition of a money game is a form of illegal investment scheme that involves promises of high investment returns in a short time. In this scheme, participants are invited to invest with promises of very lucrative profits, which are often obtained in a relatively short period of time, such as a few weeks or months.
In general, this scheme uses the tactic of recruiting new participants as a source of income. Participants who are already at the top of the pyramid will receive a bonus from the money invested by new recruits.
In reality, money games often have no legitimate source of income. Profits paid to old participants usually come from the money invested by new participants who enter the scheme.
For information, law and finance in various countries consider money games a form of fraud and illegal activity. These schemes have the potential to harm many people and can result in significant financial loss.
Money Game Features
As mentioned earlier, money games are often designed to trick people with promises of high returns or attractive investment opportunities. In fact, this scheme actually relies on recruiting new members to pay the members who have already joined.
Therefore, understanding the characteristics of this unethical money game or financial pyramid scheme is very important to protect yourself and others from potential fraud or financial loss. Here are some characteristics of the money game to watch out for, including:
- The lure of lots of profits and bonuses
The perpetrators of this money game will usually give the lure of lots of benefits and bonuses to the victims. In this case, they will offer quite high profits in a short time.
- The products sold are only camouflage.
Another feature of the money game is that the products sold are only camouflage. This means that Ponzi schemers will usually hide their company’s operations in order to cover up the fact that the profits of old members actually come from new members.
- Invite people to invest
As for the next feature, namely inviting people to invest by promising returns, even though that is just an enticement to ensnare new victims, Money games usually only sell promises, so you should be wary of investments with the lure of unreasonable returns.
- The company is not registered with OJK
The credibility of a company can also be seen by whether its operations are official or not. Therefore, if the company is not registered with the Financial Services Authority (OJK), for example, then its credibility will certainly be questioned. Therefore, be wary of unlicensed companies trying to offer investment opportunities.
How to Avoid Money Games?
After knowing the characteristics, it is also important to understand how to avoid money games. Basically, by understanding how to avoid money games, you will be protected from potential fraud and financial loss. Here are some steps you can take to avoid money games, including:
- Study the product and the company in depth
The first way is to study the product and the company in depth. That is, do research and in-depth when you are offered an investment product that has a fairly high yield. In this case, it is important to explore the track record and testimonials regarding the investment company.
- Double-check and consider financial expert advice
The next step is to double-check and consider advice from financial experts before purchasing investment products. Here, you have to check the production system, distribution, and testimonials from buyers of these investment products to avoid fraudulent money-game schemes.
- Always be careful and don’t be tempted by promises.
Basically, money games will offer promises of very high and unreasonable profits because they are promised to happen in a relatively short time. Therefore, you should always be careful and not get excited.
Business Prohibition with Money Game System
It should be noted that currently a number of countries have banned business or investment activities that use money game schemes or systems, for example in America and Australia. Meanwhile, in Indonesia, this scheme has been officially banned by the government and authorities.
For information, legal regulations regarding the prohibition on using money game schemes in business and investment in Indonesia are contained in Law on Trade Number 7 of 2014, which has been effective since March 11, 2014.
It explains that business actors are expressly prohibited from carrying out pyramid schemes. If someone violates it, in accordance with Article 105 of the law, the perpetrator can be threatened with a maximum prison sentence of 10 years and a maximum fine of IDR 10 billion.
On the other hand, the Indonesian Direct Sales Association (APLI) has also explained a number of criteria for the money game business, including:
The profit of the investment business comes from how many parties are recruited and give money, thus creating a pyramid scheme business model.
Investment business profits are calculated from the recruitment system to create a certain format that indicates a money-game scheme.
Lastly, in this investment business model, the upline will prioritize recruiting new members (downline).
Conclusion
In conclusion, it is of course very important for anyone to remain alert to illegal investment schemes, including money games, that look too good to be true. In this case, it is worth remembering that no investment provides high and fast returns without corresponding risks.
Therefore, as an alternative, you should choose investments that are legally valid and carry reasonable risks for your financial security.
As is known, legitimate investments usually have high levels of transparency, have real products or services, and, of course, comply with applicable regulations. Even though the returns may not be as big as those promised by money games, legitimate investments will provide more sustainable opportunities and have lower risks.
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So, now you understand what money games are, the characteristics, how to avoid them, and the prohibitions on doing business using this scheme.
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