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 Washington State, High-Yield Investment Programs (HYIPs) are generally considered to be securities. As such, they are subject to state securities laws and regulations enforced by the Washington State Department of Financial Institutions (DFI). These laws require that investments be registered with the state unless they qualify for an exemption. Additionally, individuals or firms offering or selling securities must be licensed as securities brokers or dealers. The DFI warns investors to be wary of HYIPs, as they often promise unrealistically high returns with little or no risk, which is a common indicator of fraudulent activity. The use of terms like 'prime bank' and aggressive promotion through social media are red flags. The DFI, along with the Securities Division, actively investigates and takes action against unregistered or fraudulent investment schemes. Investors are encouraged to verify the registration and licensing status of investments and those who sell them, and to report any suspicious investment offers to the DFI.