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 Tennessee, High-Yield Investment Programs (HYIPs) are generally considered to be high-risk and potentially fraudulent investment schemes. These programs often promise exceptionally high returns with little to no risk, which is a significant red flag for fraud. Tennessee, like other states, is subject to federal securities laws, which require investment programs to be registered with the Securities and Exchange Commission (SEC). Unregistered investments, such as many HYIPs, are often illegal. The Tennessee Securities Division of the Department of Commerce and Insurance is responsible for enforcing state securities laws, and it has the authority to investigate and take action against fraudulent investment schemes. Additionally, the use of terms like 'prime bank' in investment promotions is commonly associated with fraudulent schemes. The state of Tennessee advises investors to be cautious of any investment opportunity that sounds too good to be true and to conduct thorough due diligence, including checking registration and licensing status, before investing. If approached with such an investment opportunity, especially online or through social media, individuals are encouraged to report it to the Tennessee Securities Division or the SEC.