Investigating the concentration of High Yield Investment Programs in the United Kingdom

TL;DR

This study analyzes the prevalence and characteristics of High Yield Investment Programs (HYIPs) in the UK, revealing their concentration, registration patterns, and factors influencing their longevity using statistical analysis.

Contribution

It provides new insights into the geographic and operational features of HYIPs, especially their UK concentration and the impact of UK registration on their lifespan.

Findings

62.89% of HYIPs claim to be in the UK

55.56% are registered as UK limited companies

UK address significantly affects HYIP lifetime

Abstract

Ponzi schemes that offer absurdly high rates of return by relying on more and more people paying into the scheme have been documented since at least the mid-1800s. Ponzi schemes have shifted online in the Internet age, and some are re-branded as HYIPs or High Yield Investment Programs. This paper focuses on understanding HYIPs' continuous presence and presents various possible reasons behind their existence in today's world. A look into the countries where these schemes purport to exist, we find that 62.89% of all collected HYIPs claim to be in the United Kingdom (UK), and a further 55.56% are officially registered in the UK as a 'limited company' with a registration number provided by the UK Companies House, a UK agency that registers companies. We investigate other factors influencing these schemes, including the HYIPs' social media platforms and payment processors. The lifetime of the HYIPs helps to understand the success/failure of the investment schemes and helps indicate the schemes that could attract more investors. Using Cox proportional regression analysis, we find that having a valid UK address significantly affects the lifetime of an HYIP.