Everyone trusts gold. And many grew up trusting chit funds. That is exactly why scammers target emotional trust with fake promises. A little greed, a little nostalgia—and people end up losing their savings. These chit fund scams often look convincing, and it’s easy to fall prey to them.
How scammers exploit emotional trust
They promise unrealistic gold returns
“Double your gold in 12 months.” It sounds exciting and believable when pitched by someone familiar. Fraudsters know that many trust gold’s value deeply. So, they promise huge returns on small monthly investments. But the
gold is fake or never delivered. You end up trapped in a long-term plan in this investment scam that leads nowhere.
They use unregistered chit funds
Scammers often float chit funds without any registration or regulation. The first few cycles go smoothly to gain trust. But once more people join in, they disappear with the entire corpus. This kind of a scheme usually preys on users who avoid
banks or digital apps and rely on paper-based word-of-mouth assurance instead of formal receipts.
They exploit community networks
Scammers may pose as local agents, friends of friends, or even part of certain religious circles. They build trust slowly and use emotional language: “secure your family’s future,” or “join like everyone else.”
Once they have enough investors, they vanish overnight. Most never see the money or the scammer again.
They use fear and urgency
“You will miss out if you delay,” or “the scheme closes this week”, this is how they rush you. Scammers pressure users into hasty decisions, avoiding questions and paperwork. They may discourage you from reading the
terms and conditions and often collect cash to avoid traceability. Fear of missing out on a golden opportunity keeps victims quiet.
How to prevent it?
- Never invest in gold or chit schemes without checking official registration
- Always ask for receipts, terms, and written agreements—avoid verbal promises
- Avoid cash investments, and use bank channels with proof and tracking
- Be cautious of schemes pitched through social groups or friends of friends
- Look for RBI, SEBI, or government approvals before signing up
Final Take
Not every gold scheme is genuine. Not every chit fund is legal. Scammers play on emotion, especially trust, tradition, and fear of missing out. Protect your savings by asking questions, doing checks, and refusing high-pressure offers. When
it comes to money, if it sounds too good to be true, it probably is.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
