Everyone wants to get better returns on investment. Also, when people invest their money, they expect it to go to a legitimate company that provides a genuine product or service to make a profit. But, some dishonest people cheat investors, as they invest their money in non-existent companies or schemes, so that they can steal it. This type of fraud is known as a Ponzi scheme. Next time if you are also cautious about investing and try to identify the scheme in which you are investing money, whether it is a Ponzi scheme or not. Let us discuss some of its signs here, so that you do not get cheated. 

High returns with little or no risk

Nearly every type of investment comes with some degree of risk, and high returns usually mean high risk. Be wary of any investment opportunity that claims to offer 'guaranteed' returns without any risk.

Consistently high returns

Investments usually fluctuate over time. Be wary of any investment that shows consistently positive returns regardless of market conditions.

Avoid unregistered investment instruments.

Ponzi schemes often involve investments that are not registered with state regulators. It is important to be registered because it provides access to key information about the company's management, products, services, and finances.

Unlicensed sellers

Investment professionals and firms in India must be licensed or registered under the Securities and Exchange Board of India (SEBI) regulations. Be wary of individuals or companies offering investments without the proper licenses.

Private or complex strategies

According to Groww, avoid investments that you don't fully understand or about which you cannot get complete information. If the strategy seems private or complicated, it is a red flag.

Problems with paperwork

Errors in your account details may indicate that the promised funds are not being invested.

Trouble getting payment

If you have trouble getting payments or withdrawing cash, you should be suspicious. Ponzi scheme promoters often try to delay withdrawals by offering even higher returns to keep you invested.