This scam is one of the oldest around, and it was created by Charles Ponzi back in 1920. Initially he thought he has discovered a way to increase the profit of an investment by 400% by speculating the differences in value between the currencies of European countries (which were greatly devalued at that time due to the war) and the US dollar. For this he needed a lot of money to invest, so he opened a company called The Security Exchange Company which promised potential investors to double their initial investment in 90 days. I won’t go further into the history of this, but, as you can figure it out, it did not last long, and the entire “business” was soon based on attracting new investors at an exponential rate so he could pay the other ones that have previously invested.
Surprisingly, even if this scam put Ponzi in jail, there where many who have tried to copy the scheme during the last 50 years, and even more during the last 10-15 years since the internet has become an easier way to spread the word.
The Make Money Fast letter, written by a guy who called himself Dave Rhodes is probably the most known. The author asked the readers to send a dollar to everybody in that list after having deleted the first name from the top of the list and entered their own at the bottom. And it seems like more and more scams like this appear everyday especially because of the email.
When you receive an with “Make Money Fast”, “Get rich quick” or something similar in the title, keep in mind that the “engine” of this scheme is based on the Ponzi system and it is definitely a scam.
Technorati: Ponzi scam, Internet scams
