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Not sure if that investment opportunity is a Ponzi Scheme? Tips for spotting this type of fraud

Well known to investors across the world, the story of the Ponzi scheme is far from a new fad.

Dating back to the 1920s and named after Charles Ponzi, even with a modern upgrade, such schemes still have the same underlying principle; get rich quick! As almost everyone could use a little more money, they are extremely profitable for the people who come up with them.

If you are new to the investing game in the UK, you may feel that you are a bit savvier than the average person when it comes to spotting a Ponzi scheme. This may be true in some cases, but there are still a few signs that you should look out for when choosing to invest your money.

In this article, the top 5 signs of a Ponzi scheme are introduced along with advice on what steps to take if you have fallen victim to one in the past. Enjoy!


OK, so the basic principle of any investment is the returns; you pay in so much now into a company and in so many months, the company will have made a certain amount of money and you will make a handsome profit. For a regular business to make enough to offer you a return on your investment, you could be waiting up to 12 months or more.

A Ponzi scheme can lure unsuspecting people and inexperienced investors by offering abnormally high returns on an investment in a shorter time.

If you invested £5,000 into such a scheme, it would offer you a return of at least £2,500 in the next 2 months. This is an unrealistic return and should be avoided at all costs. If you have concerns that you have invested in a Ponzi scheme, contact a fraud solicitor for advice immediately.

No breakdown

When you are investing in a company you will want to know where your investment is going; what will it be spent on? How will it improve the company’s returns?

While fraudsters can talk the talk with sales pitches, they are usually flakey when it comes to specifics. They are often unable to provide a detailed breakdown of the company that they want you to invest in. And so, if you have concerns about a previous investment contact your local police station and fraud solicitor to discuss your options.

money breakdown


In a similar vein to the lack of financial breakdowns, Ponzi schemes are often vague on the more nitty-gritty details of a business model.

How do the fraudsters get around this? By introducing an overly-complex system, which will throw most people off as it is impossible to understand.

If you have invested money previously into a scheme which matches any of the points mentioned above, contact a fraud solicitor immediately for legal advice. They can help you seek legal recourse against any perpetrator of a potential Ponzi scheme and will work hard to get some or all of your financial investment back to you.

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