NICOSIA, Sept. 11 (Xinhua) — Investors and the public face various risks during the current period due to the extremely low-interest rates in banks, the Cyprus Securities and Exchange Commission (CySec) warned on Wednesday.

In an announcement addressed to local and international investors, it explained that during periods of historically-low or even negative interest rates in the banking sector, investors should be extremely cautious, as various individuals may offer products and services using fake representations and promising high returns.

“Through different ways and tricks, individuals and/or real or bogus or other non-regulated entities will likely try to attract the interest of retail investors, in order to entice it into dangerous or/and illegal investing schemes, such as Ponzi schemes,” CySec said.

A Ponzi scheme or game is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme can go on as long as new investors are found, otherwise it collapses.

CySec also said that complex investment products are often marketed in an aggressive way, and they are advertized with attractive slogans and promises for higher returns compared to deposit accounts, which are usually offered by banks.

“The marketing techniques used are frequently misleading and illegal,” said CySec.

It called on the public to do their due diligence and to check whether any company they have investment dealings with are regulated by CySec.

It added that if investment companies are unregulated, investors would be at risk of having no recourse subsequently.

CySec said the public can check whether a company is regulated to provide investment services in Cyprus by visiting CySec’s website for CySec-regulated entities or for firms from other EU Member States that provide investment services cross-border or through a branch.

It added that it was important for the public to ensure that a firm’s contact information matches the information listed on CySec’s website, in order to ensure that they are actually dealing with the real, regulated entity.

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