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 Minnesota, High-Yield Investment Programs (HYIPs) are generally subject to both state and federal securities laws. These programs are often unregistered investments run by unlicensed individuals and are frequently associated with fraudulent activities. Minnesota's securities laws, administered by the Minnesota Department of Commerce, require that investment programs be registered and that individuals offering investment advice or selling investments be licensed. The promise of high returns with little or no risk is a red flag for potential fraud. The use of terms like 'prime bank' and aggressive promotion through social media are tactics that have been associated with these scams. Investors are advised to verify the registration of any investment and the licensing status of the person offering the investment with the Minnesota Department of Commerce before investing. Additionally, federal laws enforced by the Securities and Exchange Commission (SEC) also provide regulations against fraudulent investment schemes. The SEC actively warns against HYIPs and similar investment scams, and it prosecutes fraudulent activities that violate federal securities laws. Minnesotans are encouraged to exercise extreme caution and conduct thorough due diligence when approached with investment opportunities promising unusually high returns with minimal risk.