High-Yield Investment Programs (HYIP) are unregistered investments typically run by unlicensed individuals—and they are often frauds. The hallmark of an HYIP scam is the promise of incredible returns at little or no risk to the investor.

An HYIP website might promise annual (or even monthly, weekly, or daily!) returns of 30 or 40 percent—or more. Some of these scams may use the term “prime bank” program. Fraudsters may use social media to promote an HYIP website or may encourage investors to use social media to share information about a HYIP website with others. If you are approached online to invest in one of these, you should exercise extreme caution—they are likely frauds.

In Alabama, High-Yield Investment Programs (HYIPs) are subject to both state and federal securities laws. These programs are often unregistered investments run by unlicensed individuals and are commonly associated with fraudulent activities. The Alabama Securities Commission (ASC) is the state agency responsible for enforcing securities laws and protecting investors from fraud. Under Alabama law, any offer or sale of securities must be registered, unless an exemption applies, and individuals or firms offering investment opportunities must be licensed. The ASC has issued warnings about HYIPs, noting that they often promise unrealistically high returns with little or no risk, which is a red flag for investment fraud. The use of terms like 'prime bank' and aggressive promotion through social media are tactics that have been linked to fraudulent schemes. Investors in Alabama are advised to verify the registration and licensing status of any investment and its promoters with the ASC before investing. Additionally, federal laws enforced by the Securities and Exchange Commission (SEC) also apply, and the SEC has taken action against numerous HYIPs for defrauding investors. It is crucial for investors to conduct due diligence and be wary of any investment opportunity that sounds too good to be true.