The Scams that You Have to Know and Avoid

You are here may be because you are interested in online business. This is good and it means you have completed the first step which is making a serious decision but this is exactly the time that you can make some mistakes and get yourself into trouble.

There are always a lot of abusers and cheaters who wait for suitable opportunities to cheat others. They know that people love to work through the Internet and make money and this is a good opportunity to rip them off.

If you like to work online, you should be aware of scams and avoid them. It is very easy to know which program is scam and which one is reliable. You just need to know how the scams behave and act and what offers they always give to cheat internet users. In this article, I am trying to categorize them to help you to know them easier.

1- Ponzi scheme programs

Ponzi scheme programs are a kind of investment programs but they have a feature that makes them illegal. In these programs, the money that new members invest will be paid to the previous members who want to withdraw their money.

Ponzi programs always pretend that they use the investors money to invest in money exchange and stock market and then will pay the investors through the profit they make but this is false because there is no investment that can make such a huge profit that enables the Ponzi programs to pay the investors.

There are a lot of programs with different names that are Ponzi scheme. HYIP and Surfing programs are the most famous ones. All the Ponzi scheme programs are illegal and in addition to losing your money, you can be in trouble because of participating in an illegal activity.

In some forums, I have read about people who have lost more than $120,000 in online HYIP programs!!!

Ponzi scheme programs are named after Charles Ponzi (1882-1949). Ponzi succeeded to collect 15 million dollars through selling coupons to 40,000 Bostonians. The coupons were redeemed at a 50% profit in 90 days and Ponzi could keep on doing this as long as he could sell the coupons to new investors and pay the previous ones.

Charles Ponzi looked like a successful businessman before he goes to jail!

In fact, his system was heavily in debt and the money he took from people was used to pay the other members and so peoples’ money was not used in any legal business. This is what that the investors didn’t know.

If you stop such a system at any time, there will be no money to pay most of the investors. When the investors found this out, they stormed Ponzi’s office to take their money back and Ponzi went to jail.

Charles Ponzi’s mugshot

This happened in 1920 and Ponzi and his money making system were newspaper headlines for a long time. Although it happened 87 years ago, I can’t get over why people still become full of Ponzi scheme program especially the online ones.

2- HYIP programs

HYIP stands for high yield investment programs. You can find them everywhere over the internet. They have been able to cheat thousands of internet users and I don’t know why nobody stops them.

In these programs, you just need to sign up and invest some money. They return your money with a huge amount of interest and profit. For example they pay 200% interest if you let them keep your money for ten days. So if you invest $10, you will have $20 after ten days. They even let you re-invest without withdrawing your money. So if you re-invest your $20, you will have $40 after another ten days and if you keep on investing, your $10 will become $10,240 after 10 cycle or 100 days.

Avoid HYIPs! OK?

It is amazing isn’t it? Yes it is but they never let you go with this amount of money. When you see such a program, you will make a calculation and think that when you can make $10,240 after 100 days and by investing $10, why shouldn’t you invest $1000 and make $1,024,000?

So you will invest as much as you can. If the program works as it is supposed to work, you will definitely make this amount of money but the problem is that none of these programs last for more than a few weeks and you not only will not make any profit but will lose the money you invest.

These programs and websites become started by scammers. They offer very high interest and make people greedy. They escape when they collect some amount of money and nobody will find out that where the money is gone.

When scams make you greedy:
$1,024,000 in 100 days! Let’s invest as much as we can.

You may think that you can get out of the game after just one cycle and before they go. Yes some people try to make money using this method but as far as I know, they lose more than what they make because most of the HYIP programs become disappeared even before one cycle becomes completed. It means they just work for few days and when they collect some money, they close the website.

Some of the others stay online for a few months by taking the money from new users and paying to the previous ones who request to withdraw (Ponzi scheme). Sometimes they succeed to collect more than 20 millions dollars before they run away.

Avoid HYIP Programs.

3- Surfing programs:

Surfing programs are other kind of HYIP just with this difference that members (investors) should surf an especial number of pages everyday to receive an interest. For example you have to surf 12 websites everyday to receive 12% of the money you have invested. You should do it for 12 days to complete a cycle. So you receive 144% of the money you invest. It means if you invest $100, you will receive $144 after 12 days.

Surfing of the pages is just to pretend that they send traffic to advertisers websites and the money they pay to the members is from the the money they receive from the advertisers. This is absolutely false because nobody pays such a huge money his website to be visited for few seconds by the surfers and then go to the next website.

Surfing programs are Ponzi scheme and so illegal. Although they are illegal, I don’t know why nobody prevents them and they come and go overnight while they have stolen a lot of money from users. Most users know nothing about these programs and just join them to make some money. They even don’t know that they join an illegal program. But some of the members already know what kind program they are joining. They just join and invest for one or two cycles and then stay away but those who are not aware that they have joined an illegal program, keep on investing and one day, when they turn on their PC to make their daily surfing, they will find out that the website is not online any more and they have lost all their money.

Surfing programs will be disappeared after a few weeks or months and all the investors will lose a lot of money. Those who were early birds and joined sooner than the others, can make more than what they invest before the program becomes closed but they should consider that the money they have received is the money that is stolen from the other members. They should know that they are participating in an illegal activity and one day they will have to return all the money they have earned.

Avoid Surfing Programs.

4- MLM or Pyramid scheme programs:

MLM or Multi Level Marketing programs are other kind of illegal program. There are some similarities between these programs and Ponzi programs. The most important similarity is that the previous members make money through the money that new members pay.

In MLM programs, you will make money only if you join, pay the membership fee and then refer others to the program and make a downline under your name. Your referrals will have to pay the membership fee and refer others to the program if they want to make any money.

In MLM program, only those who are placed at the head of the pyramids make reasonable money.

In most of these programs, you can have only two members under your name directly and all the members you refer will be placed under your referrals names. So after a while you will have a pyramid of referrals under your name. There is nothing wrong with this but something that is wrong and illegal is that only those who are placed at the head of the pyramids and also the founder of the company will make money and all other members just join, pay the membership fee for a few months, try to refer some others but as the money they make will be much less than what they spend, they give up and leave the program.

Only those who have thousands of members in their downline make money and all other members are just sacrificed. That’s why pyramid and MLM programs are illegal and you should avoid them.

Only programs that are two-tier (members can have only one level of referrals under their name), free to join and have products and so members make money through promoting the products and not through the membership fee that their referrals pay, are legal.

MLM programs can also be known as a kind of Ponzi scheme programs: Borrowing from Mike to pay John … … … .

Avoid MLM and Pyramid Scheme Programs.

5- Nigerian Scams

When you start working online and submit your emails in some websites, you will start receiving several scam emails but one kind of them are sent by the scammers known as Nigerian scammers. These emails are from people who introduce themselves as the son, daughter or wife of the well-known Africans who are passed away because of accident or terrorism. They say that the passed away person has left millions of dollars and they need someone who helps them to transfer this money from their country to a safe country.

They promise to give you a percentage of the money which can become millions of dollars. They use the same trick that the HYIP and Ponzi programs do: They make you greedy first.

Nigerian scams are also called 419 Fraud.

They keep in touch with you for a while to attract your trust and even send you some fake documents in your name that proves that the money is in your name and all the things you have to do is that you should go to a third country, open an account, deposit the money in it, pay their share and keep the balance for yourself.

You will spend a lot of time and money and go to that country but they will say that you have to pay to release the money from this and that or you have to pay to receive the Anti-Drug clearance certificate for the money that proves that this money is not earned through drug dealing and such kind of stupid stories. You have come a long way to receive millions of dollars. So you will pay the expenses to release the money but they will be disappeared suddenly after you make the payments.

You may say that this is really stupid and you will never be fooled by such a stupid story. You maybe right but they have been able to cheat thousands of people so far. I personally receive few emails from them every week. As I said, they make you greedy first and then you will do whatever they ask to release the money.

So if you received an email or fax from an un-known person who asks for your help to transfer a huge amount of money, you just need to delete the email and don’t think about it.

I always report them to the ISP and email service they use to send the emails. I will let you know how to do that in another article.

6- Other scam programs

There are a lot of other scam programs. It is hard to know them all but if you memorize just one golden rule, you will never be ripped off by them:

A legitimate and reliable home business opportunity should be FREE to join.

When they ask for money and membership fee, it is a red flag. Some examples:

• Stuffing envelope
  Stuffing envelope schemes have a lot of victims because everybody can do it and it doesn’t even need any computer and internet. The problem is that these programs are designed to rip you off not make money for you. For example they ask you to send some money and receive information. You will receive the information and will find out that you are not eligible or you will have to buy the envelops and then post them on your own expenses and nobody knows who is going to pay you after that.

  On the other hand, if something you will post to people is a scam and illegal offer, you will be in trouble.

• Assembly programs
  This one looks easy too. You just assemble some products and get paid. This is really good and there is nothing wrong with it but the problem is that they also ask for membership fee and additionally, they say you should pay for the parts you take home to assemble or in other word, you should buy them first. Then when you finish assembling, nobody will pay you.

• Data entry scams
  I have seen a lot of them over the internet. They easily cheat people because the job looks so easy: Getting paid for entering data through the computer and internet. I joined one of them and found out that something they introduce as the data entry is nothing more that advertising their products in Google AdWords. It means you should promote their products in Google AdWords to make money. The data entry part of the job is just the information you enter to your AdWords ads like the ad title and description, keywords and … . This is not in fact data entry and data entry jobs are really different.

• Paid online survey
  There are many companies that pay you to know your opinion about different products and services. This is true but why should you pay a third party to give you the list of these companies’ websites? There are some companies that sell these lists for about $35. They have been working for many years and some of them even don’t update their lists and you can find many broken links and URL of the websites that have been closed long time ago.

  I will give you a complete list of survey companies for free in one of my other articles.

There are many other websites with exaggerated claims about the products they sell. They claim that their e-books will teach you the real secrets of success in business and making real money in the shortest and fastest time.

They show you a lot of screenshots from their checks and accounts and show you the huge amount of money they make through the methods they will teach you through their e-books.

Don’t be fooled by the fake screenshots.

You can try their products but before you order them make sure that they have reliable money back guarantee. For example you can order the products that are sold through ClickBank with peace of mind because ClickBank has 56 days full and no questions asked money back guarantee and when you are not happy with a product, you can directly ask ClickBank to pay your money back and they will do it in less than a few days. You don’t even have to contact the vendor.

Good luck!

Other article to read:
The First Step to Start an Online Work at Home Business
Time Is Passing. Are You?
How to Start a “HIT” Website?
Internetic World in the Year 2015
Should You Have a Website to Run an Online Business?
How to Use the Internet and Save Time and Money
92 Reasons Why Your Website Sucks But Others Websites Make Real Money
Recommend Use of the Internet to Those Who Don’t Still Use It