“It has the effects of a financial cult”

Pyramid or snowball systems, i.e. business models that require a constantly growing number of participants to function, have been around for a long time. But through social media, the associated scams take on a whole new dimension. Criminal activities are increasingly shifting to the Internet. They all have one thing in common: the supposed promise of getting rich overnight.

To be part of these systems, participants pay a fee and must recruit new members who also invest. “Get rich quick” videos and gurus are also increasingly captivating people: In advertising videos on YouTube or Instagram, they promise quick money without much effort. You apparently learn how this works in online courses – the fee for these is partially waived if you in turn recruit new members: the scam is very difficult to detect. Victims quickly become perpetrators themselves.

“Quite often, the members of Generation Z and Alpha, i.e. those born after 1995, are the target group,” says Elisabeth Ponocny-Seliger: Today, Wednesday, the psychologist gave a press conference with Sparkasse Upper Austria CEO Stefanie Huber an insight into the scams on the Internet, which the banks are also increasingly dealing with. According to Ponocny-Seliger, many young people long for exactly the lifestyle with status symbols that is shown to them every day on social media, “and to finance it, they need money”. This group is receptive, and the promises of big, fast money are staged on a large scale on the Internet: With videos, a party atmosphere, toxic language and manipulative voice messages almost around the clock, the young people are suggested that they are part of a larger whole. “And almost every boy knows someone who has experience with such formats,” says Ponocny-Seliger. “The whole thing has the effects of a financial sect.”

Talk to others first

In order to protect yourself from fraud, Huber advises obtaining information about the company: “If hardly any information can be found, that’s a red flag.” Talking to others could also help, such as friends, parents, a bank advisor or a youth welfare office: “If fairytale prizes are promised, people should become suspicious. And you should never transfer money to strangers in advance.”