Main Differences Financial Pyramid
Main Differences Financial Pyramid – News flashes on television that another credit cooperative turned out to be a fraudulent scheme, and many shareholders have lost their savings. The question is brewing: how to recognize a real credit cooperative and not give your money to scammers?
The idea of taking possession of other people’s money has not left scammers for many years. And the idea of making a fortune without putting any effort is the dream of every Russian. Despite the fact that many financially literate Russians have learned their lesson well with MMM. There are plenty of people who invest in dubious cooperatives with the hope of getting 40% per annum.
What is a credit cooperative?
A credit cooperative is a non-banking organization created with the aim of providing mutual financial assistance. Similar forms of organization of monetary relations appeared in the past centuries. This is the best way for those in need to get financial assistance. And for those who have excess savings to earn a small income from them. Members of a credit cooperative can both receive money on a loan on favorable terms from the CPC budget, and invest there savings at interest.
Who can participate in a credit cooperative?
Federal Law of the Russian Federation (No. 190-FZ) stipulates that individuals and legal entities have the right to participate in credit cooperatives. For participation in credit cooperation, members pay payments: introductory. At the entrance to the number of participants, membership a regular payment for participation and a share – in the case of placing funds at interest.
Only members of the association are eligible to receive loans from a credit cooperative. But joining a cooperative is quite simple: fill out an application and make the first installment. Restrictions on joining a credit cooperative are more loyal to minors: you can join the ranks of shareholders from the age of 16, but you can get a microloan only from 18.
What is a pyramid scheme?
Financial pyramids are fraudulent associations that disguise themselves as legal non-banking organizations. In addition, one of the conditions for participation can be the promotion of the pyramid and the recruitment of new participants. The Russians have already learned from the bitter experience of the largest financial pyramid of the last century MMM. In which from 10 to 15 million people lost their deposits.
How to distinguish a real credit cooperative from a pyramid scheme?
There has been an increase in the detection of pyramid schemes under the guise of credit cooperatives. Deceived shareholders lost millions in the hope of making money with high interest rates on deposits. What factors will help detect fraudsters?
- The name of the organization can store important information in itself. A credit cooperative can only be called KK or KPK with the addition of the “consumer” subscript. If the abbreviations OJSC, LLC, CJSC, individual entrepreneur appear in the name of the chosen organization, then we do not recommend trusting the money to such a company.
- All credit cooperatives must be members of Self-Regulatory Organizations. If the website of the chosen cooperative indicates that they report directly to the National Bank, and there is no information about the SRO, then it is likely that this is a lie. Then there is a 90-day grace period when it can join another.
- If it is indicated in an advertising brochure or on the website of a credit cooperative that it is possible to receive a reward or bonus for attracting new members of the CPC, then this should be treated with suspicion. Such conditions are similar to standard pyramid schemes.
- The profitability of participation in such an organization should not exceed more than 2 times the key rate of the Central Bank of the Russian Federation. If the credit cooperative offers its members higher rates. Then it is necessary to check, due to what the interest rate increases.
- All organizations that collect or issue financial resources to the population must be registered with the Central Bank of Russia. Therefore, you can check the selected credit cooperative according to the register on the official website of the regulator.