Online Frauds and Pyramid Schemes – The Digital Trap of the Modern World and How to Deal with Them

With the development of the internet and digital technologies, fraud has changed its form – from the classic deceitful merchant to an anonymous social media profile or a well-designed “investment” website. In this context, online fraud and pyramid schemes are among the most widespread forms of economic crime in the digital age.

Legal basis: Criminal Code (Art. 209 – fraud) and the Consumer Protection Act – in cases of online trade.

Online fraud is deliberate deception aimed at unlawful gain, carried out through electronic means – social networks, email, e-commerce platforms, investment websites, etc.

Legal basis:

• Art. 209 CC – fraud for pecuniary benefit;

• Electronic Commerce Act – in cases of misleading information or unfair practices.

A pyramid scheme is a financial model where income is not generated from real activity but from contributions of new participants. The scheme collapses once the flow of new investors decreases. Many of these are disguised as “investment clubs,” “marketing platforms,” or “sharing communities.”

Legal basis:

• Anti-Money Laundering Act – if financial crimes are suspected;

• Financial Instruments Markets Act – for “investment” offers without a license.

Criminal liability:
According to the Criminal Code, fraud is punishable by imprisonment from 1 to 6 years. For aggravated cases – large-scale fraud, recidivism, or multiple victims – punishment reaches up to 10 years.

Legal basis:

• Arts. 209 ff. CC – ordinary and aggravated fraud;

• Art. 253 CC – money laundering;

• Civil Procedure Code – to claim compensation.

How to recognize frauds and pyramids?

• Promises of quick profits without risk – be suspicious;

• Requests to enter banking details on unknown websites – stop immediately;

• Pressure to “invest” via apps or cryptocurrencies without a licensed company – a pyramid warning;

• The main activity is “invite more people and you will earn” – that is a scheme.

Legal basis:

• Consumer Protection Act – ban on misleading and aggressive practices;

• Electronic Identification Act – in cases of online identity theft.

How to protect yourself:

• Check licenses and registration (BNB, FSC, EU authorities);

• File a report with the Prosecution, Cybercrime Department of GDBOP, CPC, or FSC;

• Keep all evidence (correspondence, bank statements, screenshots);

• Do not share personal data and passwords;

• Use verified online platforms.

Conclusion:
Online frauds and pyramid schemes are dynamic and often well-disguised forms of crime. Legislation provides protection – but it begins with our vigilance and awareness.

If you or your relative are victims of online fraud or a pyramid scheme, it is best to consult a criminal law attorney. This article does not constitute legal advice or opinion from Atty. Mihail Tomov.