What to Avoid (part 2)
Money Games
Now first of all, many of these money games are technically illegal. If there is no product involved, just a distribution of money, then it is probably illegal.
Illegality aside, what benefit could there be for you in joining in with these Money Games? Well, they do seem very convincing with their clever websites and promises of big money for everyone. But what is the reality?
Lets take a look at a few examples.
HYIP – High Yield Income Programs are, according to them, ‘investment’ schemes. You pay in your money, usually through an electronic gold currency such as Liberty Reserve (because no other payment processor will touch them) and they promise you returns on your money vastly superior to anything you could get at any bank or savings plan, often hundreds of percent profit on your money. You choose between a short term profit over a couple of days, or a longer term profit with much higher profit over a few months.
The vast majority of these HYIP programs are ponzi schemes, where money from new investors pays the profits to the previous investors. Money is just moved around until it runs out and then the program disappears, with a new one appearing again under a new name to start all over again.
One program that I know of also has another nasty sting to it. The minumim investment they advertise on their website is $400. When you pay your $400 they then tell you that their terms have changed (although nothing is mentioned before you pay out) and that their minimum investment is now $4,000. No refunds are offered and you have to pay them another $3600 if you want to participate. Despite promoting their site through Google groups, Google do not block them, nomatter how many complaints are sent, and the payment gateway (Liberty Reserve) will not block them or help you recover your money. Basically you can do nothing but give up on your $400 or risk another $3,600 to see if you get anything back. So they collect $400 a time from lots of people, provide no service whatsoever, and never return any money to anyone. A total scam but very profitable and protected and supported by two large and influential websites. Amazing but true, and this site has been in operation for a few years now so I should imagine the owners are very well off by now.
Cycler Programs – You will find thousands of these if you do a search on any search engine. The idea with these is that you put some money in to join, then whether you refer other people to the program or not, when the ‘cycle’ occurs you can receive part of the money paid in by other members who joined after you. Again this works on the ponzi method of paying existing members with the money from new members. Only a few people in the program can ever make a profit, some will get part of their money back, and some will get nothing at all.
Pyramid Schemes – Dating back to a few decades agao, these schemes keep showing up in new forms and with new twists to them but essentially they are all the same. To join the program you make payments either to several other members in your ‘upline’ or make one payment to the website who are running that particular program and then they spread the money out after taking their cut. To make anything at all you need to sell the idea to other people so that they pay in, giving you your first payment, and then they have to sell it to other people and so on. The people at the top of these pyramids can make HUGE amounts of money while the people lower down often do not make enough to cover the money they pay out on joining and promotion.
The thing that ALL of these schemes have in common is that they really are not worth even considering. You will damage your reputation and your bank balance if you get involved with these or any of the newer variations that appear from time to time. Just don’t do it.
Just remember the golden rule – If it sounds too good to be true, then it probably is.
