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A Guide to Consumer Scams continued...
CHAIN LETTERS
A chain letter is a
"get rich quick" scheme that
promises that your mail box
will soon be stuffed full
of cash if you decide to
participate. You're told you
can make thousands of
dollars every month if you
follow the detailed
instructions in the letter.
A typical chain letter
includes names and addresses of
several individuals whom you
may or may not know. You
are instructed to send a
certain amount of
money--usually $5--to the
person at the top of the
list, and then eliminate
that name and add yours to
the bottom. You are then
instructed to mail copies of
the letter to a few more
individuals who will
hopefully repeat the entire
process. The letter
promises that if they follow
the same procedure, your
name will gradually move to
the top of the list and
you'll receive money -- lots
of it.
There's at least one problem
with chain letters.
They're illegal if they
request money or other items
of value and promise a
substantial return to the
participants. Chain letters
are a form of gambling,
and sending them through the
mail (or delivering them
in person or by computer,
but mailing money to
participate) violates Title
18, United States Code,
Section 1302, the Postal
Lottery Statute. (Chain
letters that ask for items
of minor value, like
picture postcards or
recipes, may be mailed, since
such items are not things of
value within the meaning
of the law.)
Recently, high-tech chain
letters have begun
surfacing. They may be
disseminated over the Internet,
or may require the copying
and mailing of computer
disks rather than paper.
Regardless of what technology
is used to advance the
scheme, if the mail is used at
any step along the way, it
is still illegal. The main
thing to remember is that a
chain letter is simply a
bad investment. You
certainly won't get rich. You will
receive little or no money.
The few dollars you may
get will probably not be as
much as you spend making
and mailing copies of the
chain letter.
One scam witnessed by the
author of this article was a
very clever chain letter
that contained a reference to
a publishing company that
would reproduce the chain
letter for you so you could
send it out to thousands
of people, supposedly at a
great price and on recycled
paper. A little background
check revealed that the
"publishing
company" was owned by the originator of
the letter! Additionally,
their rate for reproducing
the letter were much more
expensive than competitive
rates at local print shops.
Just imagine all the money
this con artist made on
people who were gullible
enough to pay him to
reproduce his chain letter!
Chain letters don't work
because the promise that all
participants in a chain
letter will be winners is
mathematically impossible.
Also, many people
participate, but do not send
money to the person at
the top of the list. Some
others create a chain letter
that lists their name
numerous times--in various forms
with different addressee.
So, in reality, all the
money in a chain is going to
one person. Do not be
fooled if the chain letter
is used to sell inexpensive
reports on credit, mail
order sales, mailing lists, or
other topics. The primary
purpose is to take your
money, not to sell
information.
"Selling" a
product does not ensure legality. Be
doubly suspicious if there's
a claim that the U.S.
Postal Service or U.S.
Postal Inspection Service has
declared the letter legal.
This is said only to
mislead you. Neither the
Postal Service nor Postal
Inspectors give prior
approval to any chain letter.
Participating in a chain
letter is a losing
proposition.
Turn over any chain letter
you receive that asks for
money or other items of
value to your local postmaster
or nearest Postal Inspector.
Write on the mailing
envelope of the letter or in
a separate transmittal
letter, "I received
this in the mail and believe it
may be illegal."
CON ARTISTS
INVESTMENT FRAUD
OPPORTUNITY SCAMS
CHAIN LETTERS
SCHOLARSHIP SCAMS
FEDERAL JOB FRAUD
OTHER ILLEGAL ACTIVITIES
THE COOLING OFF RULE
GENERAL TIPS FROM THE FTC
SOME PORTIONS OF THIS REPORT ARE EXCERPTS FROM THE FTC | |
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