High-Yield Investment Program (HYIP)

An investment scam that guarantees significantly high returns on investments using money provided by other investors

What is a High-Yield Investment Program (HYIP)?

A high-yield investment program (HYIP) is an unregistered investment vehicle that promises significantly higher returns with little or no risk. They are typically run by unlicensed individuals and are scams, taking money from new investors to pay existing investors. 

HYIP can also be referred to as a prime bank scam because scammers may tell investors that their investment is involved with financial instruments from prime banks. However, in reality, it is not the case because they are not involved with any prime bank.


High-Yield Investment Program (HYIP)


A high-yield investment program is also a type of Ponzi scheme, a fraud that tries to attract investors by paying them profits using the money invested from new investors. In such an arrangement, investors are unaware that the profits they are being paid with come from the money belonging to other investors. The organizers of the fraudulent scheme may falsely claim that the profits come from dividends, product sales, or excess cash flow from a business.

The goal for a Ponzi scheme is for the scammers to get money from investors and continue recycling the money they receive from investors to give to new investors. In reality, however, there are no actual profits. Once the scheme becomes unsustainable, the scammer will take all the money, and investors will lose everything they invested.


Characteristics of a High-Yield Investment Program

Below are some of the characteristics of a high-yield investment program. If you ever come across an individual, organization, or website that seems suspicious, here are some telltale signs that can help differentiate a scam from something legitimate:

  • High-yield investment programs often promote unrealistically high returns to attract victims, such as promising more than 100% returns in one year.
  • Scammers are usually not transparent about the business they are in or the transactions that occur to hide the fact that there is no real business and no actual profits.
  • Scammers will be very vague about the investments that they work with, such as not being very clear about where the investor’s money is invested and how portfolios are managed.
  • The website may not provide important legitimate details, such as contacts, terms and conditions, privacy policy, and legal disclosures.


How to Avoid a High-Yield Investment Program

If the returns of an investment seem unreasonably high with little to no risk, it is a sign that you should be careful about the investment. Speak with an investment professional if you are unsure about anything. If you come across a questionable investment online, make sure that you also do your research to ensure it is a legitimate investment established by a credible organization.

Research to see if there are any analyst reports or news articles that can give you a hint about the credibility of the investment. Additionally, be watchful for suspicious websites – do not easily give out personal information to websites that you are not familiar with. Install antivirus software and spyware checker to protect your computer.


HYIP Examples



Technology and digitization are now making it easier for people to organize fraudulent financial schemes. In particular, high-yield investment programs exist in the cryptocurrency market. Scammers like to take advantage of anonymity because Bitcoin can be exchanged over the Internet with just a wallet address.

It is also not difficult for scammers to create a deceptive website that advertises an unusually high return for Bitcoin. If they are able to attract people who can provide them with a sum of money, the scammers will add the potential investors to their scheme, where they will fund investors with returns that come from the money of other investors. Eventually, the website may disappear from the Internet, and investors will lose all the money that they’ve deposited on the website.


Zeek Rewards

Zeek Rewards was an organization run by Paul Burks. It advertised an investment opportunity that promised returns that came from the profits of Zeekler, which was a penny auction website. It guaranteed investors returns of 1.5% each day. They also required investors to pay a monthly subscription fee. However, when investors got their returns, the money came from the investments provided by new investors.

In the end, Zeek Rewards was engaged with a $600 million Ponzi scheme that impacted approximately one million investors. It became one of the largest Ponzi schemes in history. The U.S. Securities and Exchange Commission (SEC) officially filed a complaint against Zeek Rewards and Paul Burks in 2012. In July 2016, a federal jury convicted Burks of wire and mail fraud, wire and mail fraud conspiracy, and tax fraud conspiracy.


Related Readings

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