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Beware the ponzi scams!

Today I received a letter in the (postal) mail that started out like this:

"My name is Kevin Day and in September 2003 I lost my job. At the time I was living at the edge of my means and in debt..."

Now obviously a lot of people receiving this email would say "hey, that's just like me!"

The letter goes on to explain how, a little later on (in 2004), Kevin received a letter (just like the one I received) that changed his life.

Now he's made over "$800,000" by just following the simple instructions.

What's more, Kevin promises faithfully that: "if you decide to follow these instructions EXACTLY you will receiver [sic] over $70,000.00 in cash within the next 60 days."

My goodness, it sounds almost too good to be true doesn't it?

It seems that all you've got to do is send $10 to the person at the top of the list contained in the last page of the letter then send a copy of the letter to at least 200 other people.

The letter suggests you get these names and addresses out of the phone book at random and that you remove the name/address of the person you've just sent $10 to from the top of the list while placing your own name and address at the bottom on all 200 copies.

It also says that you must include a note with the $10 that declares the $10 to be a "gift".

The claim is that "this note guarantees that you are operating with in the law in New Zealand"

Well if you're stupid enough to believe all this then you deserve to lose your $10 *and* be prosecuted for involvement in an illegal pyramid scheme.

This is just a huge scam that preys on people's stupidity, greed and ignorance.

Fortunately, most people know this is a scam - but unfortunately (and the fact that I received such a letter proves) there are still plenty of greedy, stupid people out there.

With times set to get tougher, there's a huge risk that even more stupid people will fall for these scams so I've written this page so you can refer potential dupes to it for some basic facts and to expose those total idiots who have been scammed or are scamming others.

Where does the money come from

Firstly, if everyone who participates in this scheme really was to receive the promised $70K, just where would that money come from?

This pyramid scheme doesn't create new money so for every dollar that someone receives, someone else is losing a dollar.

The answer is that the only person who's likely to get the $70K is the nasty sod who starts the chain with the intent of scamming the poor fools who believe what's written.

Everyone else will end up paying out their $10 and get *nothing* in return.

Don't believe me? Well let's do some math...

One person starts the scam and sends the letter to 200 others.

That 200 send the letter to another 200 - now there are 40,200 involved.

If that 40,200 each send out 200 letters then there'd be 8,040,200.

At the next step of the pyramid would see the most recently recruited 8,00,000 people sending out 200 letters for a total number of 168,040,200 letters in circulation.

And so far there are only *FOUR* names on the list and we've exceeded the entire population of NZ by a factor of 40

But of course this assumes that every one of the 200 letters sent out by every person receives a response -- which we know it won't.

And indeed, the letter suggests you'll only get a 3% response rate.

It then goes on to suggest that for you to get your $70,000, more than a quarter of million people will have had to receive the letter that has *your* name at the top of the list of five names.

Now stop and think about that for a moment...

To get to the top of the list, everyone above you will also have had to reached 311,000 people with a response rate of 3%. If you're number five then before you see a penny, 1.5 million *additional* people will have had to seen this letter as a result of the 200 copies you mail out, and at least 3% of them will have had to joined in.

But hang on -- for this to work as claimed, 1.5 million people will also have had to have seen the letter for each of those already on the list above you -- which comes to a staggering total of six million -- yet NZ only has a population of four million.

Does this smell like a scam now?

So here's what we do now.

I'm listing the names and addresses of those who were stupid enough to put their names to this illegal scheme and I encourage others to contact me with copies of any similar letters they may have received.

• D.A. Brinkhurst, 1/39 Norwich Road Stoke, Nelson 7011
• R&J Bint, 45 Flemington Road RD 14, Wanganui 4584
• L. Wallace, 3 Cormack Place, Greenmeadows, Napier 4112
• S. Hickman, 5 albemarle Street, Sydenham, Christchurch 8023
• H. Walden, 32A Simons Street, Moturoa, New Plymouth 4310