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 Colorado, 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. Colorado securities laws, enforced by the Colorado Division of Securities, require investment programs to be registered and for individuals selling these investments to be licensed. The promise of high returns with little or no risk is a red flag for investment fraud. The use of terms like 'prime bank' and aggressive promotion through social media are tactics often employed in these scams. The Colorado Division of Securities warns investors to be cautious of such offers and to conduct thorough due diligence before investing. Additionally, federal laws under the Securities and Exchange Commission (SEC) also provide regulations against fraudulent investment schemes. Investors are encouraged to verify the registration of both the investment and the person offering the investment with the SEC or the Colorado Division of Securities before committing funds.