A schemes scam refers to fraudulent investment schemes designed to deceive people and steal their money by promising unrealistic profits or quick financial gains. The most common examples are Ponzi schemes, where the income of new investors is used to pay earlier investors with the illusion of continuous returns, and pyramid schemes, where individuals receive their money from the recruitment of others without selling real products or services. Both are based on continuous recruitment, and in the event of cessation of new investments, they collapse. Other forms include pump-and-dump schemes, where scammers inflate stock prices with false claims before selling at a profit, and advance fee scams, in which victims are tricked into paying upfront fees to unlock supposed future payouts.

These scams often share clear warning signs: guaranteed high returns with little or no risk, consistent profits regardless of market conditions, and pressure to invest immediately. Scammers also tend to be vague about how the investment works and may demand upfront payments for “processing” or “registration.” Legitimate investments are transparent, regulated, and carry some level of risk. Staying skeptical of get-rich-quick opportunities, verifying company credentials, and consulting financial professionals before investing are key ways to avoid falling victim to such fraudulent schemes.

Decode has reported that a fake loan app called CandyCash used the name of an RBI-approved company and a 14-year-old boy’s phone number to run a scam. Victims were blackmailed and threatened with morphed photos over fake loan repayments. The company’s owner discovered the fraud after receiving distress calls, and police later found the scammers had tricked the boy into registering the app. Decode noted that such fake loan app scams have sharply increased since the pandemic.