BEWARE OF GET-RICH-QUICK SCHEME AND MAKE MONEY FAST SCAM ................................................................................................. They Attract their customer (would be victim) by displaying MONEY and NOT the VALUE of their PRODUCTS OR SERVICES OFFERED. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information. INTERNET PYRAMID MATRIX SCHEME FRANCHISE FRAUD PYRAMID SCHEME A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The essential idea is that a con artist Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the business expands. Such businesses seldom involve sales of real products or services to which a monetary value might be easily attached. However, sometimes the payment itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information. The flaw is that there is no end benefit. The money simply travels up the chain. Only the originator (sometimes called the pharaoh) and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit MATRIX SCHEME Matrix schemes use the same fraudulent non-sustainable system as a pyramid; here, the participants pay to join a waiting list for a desirable product which only a fraction of them can ever receive. Since matrix schemes follow the same laws of geometric progression as pyramids, they are subsequently as doomed to collapse. Such schemes operate as a queue, where the person at head of the queue receives an item such as a television, games console, digital camcorder, etc. when a certain number of new people join the end of the queue. For example ten joiners may be required for the person at the front to receive their item and leave the queue. Each joiner is required to buy an expensive but potentially worthless item, such as an e-book, for their position in the queue. The scheme organizer profits because the income from joiners far exceeds the cost of sending out the item to the person at the front. Organizers can further profit by starting a scheme with a queue with shill names that must be cleared out before genuine people get to the front. The scheme collapses when no more people are willing to join the queue. Schemes may not reveal, or may attempt to exaggerate, a prospective joiners queue position which essentially means the scheme is a lottery. Some countries have ruled that matrix schemes are illegal on that basis FRANCHISE FRAUD Franchise fraud (or franchise churning) is defined by the U.S. Federal Bureau of Investigation as a pyramid scheme. The FBI website states: pyramid schemes :—also referred to as franchise fraud or chain referral schemes—are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses.[37] One of Pearlasia Gamboa’s (president of the micronation of Melchizedek) franchise fraud schemes was described by the Italian newspaper La Repubblica as “one of the most diabolical international scams ever devised in recent years.”[38] Notable recent cases Internet In 2003, the United States Federal Trade Commission (FTC) disclosed what it called an internet-based pyramid scam. Its complaint states that customers would pay a registration fee to join a program that called itself an internet mall and purchase a package of goods and services such as internet mail, e-Books and that the company offered significant commissions to consumers who purchased and resold the package. The FTC alleged that the companys program was instead and in reality a pyramid scheme that did not disclose that most consumers money would be kept, and that it gave affiliates material that allowed them to scam others.[39] WinCapita was a scheme run by Finnish criminals that involved about €100 million
Posted on: Wed, 01 Oct 2014 21:44:07 +0000
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