Ponzi Scheme Defined

With rich man Madoff being all over the news lately, many have been asking “what is a Ponzi Scheme “. A Ponzi scheme involves using new investors’ money to pay off promised money to the older investors (or the first investors). Usually done with investments that go bad when dividends and payouts are promised, are not made and are still paid.

So if I want to start a Ponzi Scheme up I would start by finding an investor, let’s call him Scammee. So I would get Scammee really interested in  investing money into something that sounds promising, lets say they are dingle berries. If the investment goes well, then Scammee can get the money that was expected. Unfortunately, I had to guarantee such high payouts on my dingle berry investment that hitting my mark is going to be impossible.  This doesn’t bother me since I had the intention of spending the money on myself anyway. So I tell Scammee how my dingle berries are really doing well and pay him out. Too bad I am using his invested money to do so.

So over time, Scammee is getting paid and still thinks he has his original money invested and would be able to get it back once he sells his shares of dingle berries.  This is where a Ponzi Scam gets interesting. Either through the happiness of Scammee or me  being able to brag about his payouts, I attract new investors. Now I have picked up two new people interested in my dingle berries, Scammed and Frauded. Since I am almost out of money from Scammee and my luxurious spending habits on wine and arugula, I have to use the money from Scammed and Frauded to now pay off Scammee. This goes on and on until I either catch a plane and escape with my dingle berries intact never to be seen again, or the market tanks, everyone wants their money back and finds out how my dingle berries are a big sham.

          

Read up and avoid being a scam or fraud vicitim

Emotional Recovery for Scam or Fraud Victims

Many people think that scam or fraud victims stop grieving once they’ve realized that they’ve been taken by a scam. However, that couldn’t be farther from the truth. Scam or fraud victims undergo constant self-scrutiny, public humiliation, guilt and both the economical and emotional impacts that go along with being one of the many scam or fraud victims. If you’re a scam or fraud victim that needs help learning how to cope with your current situation, below are a few tips that’ll get you on the proper track to recovery.

Recovery for Scam or Fraud Victims

Most importantly, you need to realize that being a scam or fraud victim isn’t your fault. You were targeted by a malicious scammer that intended to steal your money. The scammer knew what he was doing and used every trick up his sleeve to make you one of his scam or fraud victims. Stop blaming yourself and begin blaming the person who’s responsible for making you and your family scam or fraud victims.

Don’t stand for public humiliation. If someone says, “you should’ve known better.” Respond by saying to them “everyone can fall victim to a fraud, look how many friends you have!” … It may seem hostile, but it’s necessary to put critics in their place. Standing up for yourself will give you assurance that you’re not responsible for what has happened. You’ll understand that you’re merely a scam or fraud victim, not the perpetrator.

If your spouse is making herself out to be the scam or fraud victim and pegging you as the culprit, sit her down and let her know how terrible you feel. Know that it’s alright to cry together. Scam or fraud victims need to let out their pent up emotions so bottled up feelings won’t have a lethal effect on the family. You’ve been hit by a scam artist and there wasn’t much you could’ve done to stop it at the time. Yes, you are both scam or fraud victims but, reassure her that you’ll educate yourself on how identity theft and other frauds function in order to prevent yourselves from becoming scam or fraud victims again.

          

Internet business scams are often too good to be true

Don’t Fall for Internet Business Scams

There are many scams on the internet, but internet business scams seem to be the most prevalent. Because just about everyone wants to be a work at home mom or operate their own home based business, internet business scams have become wildly successful. Internet business scam artists prey on the hopeful innocence of entrepreneurs-to-be and exploit their aspirations in order to drag them into their internet business scams. If you’d like to start an online business, don’t be deterred by the many internet business scams. Follow the tips below to discern which internet business opportunities are legitimate and which are internet business scams.

Uncovering Internet Business Scams

For years, internet business scams would create landing pages for their eBook “success systems” which contained testimonials from fictitious satisfied customers. Internet business scams would also over-promise but under-deliver (e.g. you’ll earn $5,000 each week by working part time hours). But, thankfully as of December, 1st 2009 the FTC has made it illegal to include any fictitious or over-dramatized results. Sure, there will still be many internet business scams around that do not comply with the new FTC guidelines, but eventually they will be dealt with and shutdown.

When considering the purchase of a product that may potentially be an internet business scam, analyze every detail. If the product promises to make you riches for little to no effort on your behalf, there has to be a catch. Nothing of any value comes easily; keep that phrase in mind when analyzing potential internet business scams. To ensure that the product you’re interested in isn’t an internet business scam, enter the phrase “(insert product or company name) scam” into Google or Complaintsboard.com. If it is an internet business scam, surely others who’ve fallen for the internet business scam have made the online world aware of their complaints.

          

Mail scam - traditional scams still prevalent

The Ins and Outs of a Mail Scam

If you think that the only way scammers can target you is through the internet, you’re sadly mistaken. Scammers can target you through your very own mailbox! Mail scams have been popular since the mid 80’s, but due to the staggering advances in technology, most scammers took their mail scam online and began to run internet based mail scams (email scams). However, there are still mail scams going around in the current times. If you’ve ever received a “Congratulations, you’ve won $5,000!” letter in the mail, you’ve received a mail scam. Read below to get a description of what mail scams are.

What are Mail Scams?

Though it may be hard to differentiate, there certainly is a difference between direct mail pieces and a mail scam. Direct mail pieces try to convince you to purchase a legitimate product or service. However, mail scams lie to you in order to convince you to send them your hard-earned money. Mail scam operators typically rely on two tactics to convince you to fork over your cash. The mail scam may convince you that you’re in financial trouble with the government and you must send an immediate payment to the specified address to avoid incarceration. Another favorite tactic for mail scam operators is to convince you that you’ve won an international lottery. But, you’ll be told that you must pay several thousand dollars in transaction fees in order to receive your cash (which you never will). Most mail scams will use a variation of the two tactics.

Mail Scam Operators

If you do receive a mail scam, know that you most likely weren’t a specific target. Mail scam operators simply send out a mass mailing and hope that a few victims will take the bait of their mail scam. Notice that your name will never appear on the mailing itself. Don’t you think if you truly did win a lottery or were wanted by the federal government that they’d at least have the courtesy of acknowledging your name? If you do receive a mail scam in your mailbox, contact the FTC or the IC3, an FBI operated organization.

          

Ponzi scheme is defined as Investment Fraud

To Study How the Ponzi Scheme is Defined

Getting the Ponzi scheme defined is something that has been done lately in many places. The Ponzi scheme is defined and named many different ways. You may have heard the Ponzi scheme defined as: Ponzi scam, Ponzy Scheme, Madoff Ponzi scheme, Ponzi scheme fraud, Ponzi investment, Ponzi pyramid scheme, Ponzi game, Charles Ponzi Scheme, Ponzi schemes and Ponzi system. Thanks to Madoff being ever present in the news, a good Ponzi scheme definition is not hard to come by. I have gathered what I can from all of the Ponzi Scheme definitions to get you the most up-to-date and conclusive definition of a Ponzi scheme.

The Ponzi Scheme Defined by All

The Ponzi Scheme is defined as an investment scheme where a scammer or frauder takes your money to invest it but then pays you and other investors back with the same money after taking lot of it to put it in their own pockets first. A Ponzi scheme defined by the U.S Securities and Exchange Commission call it the “rob Peter to pay back Paul” principle where early investors are paid off by new investors until the whole Ponzi Scheme collapses. A Ponzi scheme defined by Wikipedia is a fraudulent investment operation where other separate investors are paid returns from their own investments or from other subsequent investors, but not from actual and realized profits. A Ponzi scheme defined by the New York Times is when potential investors are wooed by unusually large returns only to be repaid by there own investments and can continue as long as new investors are found. A Ponzi Scheme is defined by Investopedia as an investing scam promising high returns with little risk operating by generating returns for initial investors by paying them with the money of new investors. These are only a few of the many ways a Ponzi scheme is defined online.

The Very First Ponzi Scheme Defined

Charles Ponzi created what is now defined as the Ponzi Scheme in the 1920’s. Charles Ponzi saw how the differences between U.S. and foreign currencies could be exploited through buying and selling mail coupons. The first Ponzi scheme has been defined as getting $1 million dollars in just 3 hours (but in 1921!). Charles Ponzi was able to generate this kind of money by telling investors he would get them a 40% return in 90 days. Charles Ponzi Only made $30 dollars worth of actual purchases of the international mail coupons. The only other money he parted with was paying off a few early investors.

Charles Ponzi in one of many arrests before the Ponzi Scheme

Charles Ponzi – The man behind all the defined Ponzi schemes

How can we define a Ponzi scheme without talking about Charles Ponzi? Charles Ponzi born in Lugo, Italy in 1882, came to America in 1903. Charles Ponzi arrived in Boston with only $2.50 in his pocket since he gambled all of his savings away on the voyage to America. He moved to Montreal and became a bank manager at a bank that went bankrupt with the owner fleeing to Mexico with the investors money. After a couple of stints in prison for various offenses, Charles Ponzi found himself back in Boston where he soon after got married.

Charles Ponzi then tried starting a business listing service (a catalog or directory equivalent) which soon after failed. Shortly after, an Italian company had sent a request for the catalog with a International Reply Coupon (IRC). This is the moment that defined the Ponzi Scheme. He would be able to take these IRCs and exchange them for U.S equivalent of the stamps and sell them. Since the stamps from Italy were much cheaper, the ability to buy them there and then exchange them would be very profitable.

The Madoff Ponzi Scheme

The Madoff Ponzi Scheme

Recently, the Madoff Ponzi Scheme has been all over the news. The Madoff Ponzi Scheme involved the biggest investment scheme known about in American history. The Madoff Ponzi Scheme cost investors and estimated 18 Billion dollars.

Here is an example of what a Madoff Ponzi schemeis or how a Ponzi Scheme is defined in an example.

          

Don't get roped in by a smooth love scam operator

Online Daters in Danger?

At some point or another, all sectors of the internet will become tainted. The bad news for online daters is that the online dating scene is slowly being overtaken by love scam operations. Love scams are more common than most people think. In fact, many online daters have encountered love scam operators without even knowing it; the virtual relationship may have ended before the love scam operator had a chance to stiff their online lover. Below, you’ll find several tips on identifying love scam operators.

Signs of a Love Scam

The first sign that you’re chatting with a love scam operator is that they’ll be located in African countries, such as Nigeria or Kenya. Love scam operators typically will send pictures of extremely attractive people, which appear to be American models. To top it off, they’re barely able to hold a cohesive conversation and the emails will more than likely contain many, many misspellings. Even at the start of an online relationship, this should be a dead giveaway that you’re dealing with a love scam. How would someone that was born and raised in Nigeria look just like an attractive American model (and might even be in an American home, high school or college throughout the photos you’re shown) yet have trouble spelling at an elementary level? Use your gut. If you smell something fishy, end the communications immediately; you’re most likely dealing with a love scam operator.

If you continue into a virtual relationship with a love scam operator, your wallet will eventually be hit up for cash… a fairly substantial amount of cash. But, the con artists behind the love scams aren’t idiots; they’ll wait until you trust them and may have even developed strong romantic feelings before they ask for money. This may take anywhere from three to twelve months, but love scam operators are willing to commit to schmoozing you for that amount of time in order to be compensated.

          

You fool! Don't celebrate...it's an email lottery scam

Identifying Email Lottery Scams

Disregard emails which notify you of your winning ticket in an international lottery; it’s just one of the many email lottery scams targeted towards unsuspecting internet users. The email was sent by con artists who make their money by operating fake lottery scams online. Most seasoned email users won’t fall for email lottery scams because they’re used to the junk mail piling up in their email accounts. However, there are a few users that are more susceptible to falling prey to email lottery scams.

Questions to Ask About Email Lottery Scams

The email users that are more susceptible to email lottery scams are fairly inexperienced email users. The elderly and young teens particularly fall into this pool. Having a high spam guard in place is one of the main ways to prevent receiving email lottery scams in your inbox. The fake lottery scams will simply land in your Spam or Junk mail inbox. But, if you do happen to open up a few email lottery scams, all you need is a bit of common sense to decipher that the “lottery” is indeed a fake lottery scam.

The questions you must ask yourself in order to decipher whether it is indeed an email lottery scam are as follows. Did I sign up for this lottery? Am I even eligible for an international lottery? How did they get my contact information if I didn’t willingly sign up for this lottery? Why don’t they know my name? If this is legitimate, why would they not contact me by phone, snail mail or schedule an in-person meeting? By simply taking three minutes of your time to analyze the answers to these questions, you’ll quickly realize that it is indeed an email lottery scam. Don’t just sit back and do nothing when you receive email lottery scams in your inbox; report email lottery scams to Fraudwatchinternational.com

          

Lock away any important information cause it could be a internet scam fraud

Shielding yourself from Internet Scam Frauds

Maintain a cautious mindset when browsing the web, because Internet scam frauds are out to get unsuspecting users. Internet scam and hoaxes are on the rise. Internet scam frauds range so widely that you may get scammed when purchasing an item or even by downloading a free trial to a computer game. If you’d like to keep your money in your pocket and your computer free of Trojans, below are some tips to help you steer clear of internet scam frauds.

Steering Clear of Internet Scam Frauds

Unfortunately, in order to keep internet scam frauds out of your path you’ll need to develop amazing senses towards sniffing out internet scam and hoaxes. You must observe each and every online encounter as a possible internet scam or frauds. If you’re going to purchase an item on a website that isn’t established, run a Google search with the words scam or fraud along the website name (e.g. Hookie.com scam) to ensure that it isn’t another one of the many internet scam frauds.

Internet scam frauds can be embedded into free downloads. You’re better off forgoing the free download and simply paying the fee required to safely purchase the product. Paying the small fee may save you thousands of dollars in computer repairs and identity theft from internet scam frauds in the long run. Of course, government websites are the exception as they deliver secure files that are free from internet scam fraud attempts.

The Bottom Line about Internet Scam and Frauds

The sad truth is that you aren’t safe online. Internet scams and hoaxes are everywhere these days, but taking simple precautions will help you steer clear of internet scam frauds. When you’re browsing the web, remember to keep an eye out for any suspicious signals and to make wide decisions when it comes to downloading files or purchasing items from unknown websites. If you do purchase an item and encounter internet scam frauds, voice your terrible experience to the folks at Complaintboards.com. If you download a corrupt file, contact the website’s webhost to get the website shut down.

          

Internet Love = GOOD...Internet Love Scams=BAD

Online Daters Beware of Internet Love Scams

Are you looking for love online through dating websites and chat rooms? If so, you need to beware of the internet love scams floating around on the internet dating scene. Internet love scams are typically operated by Nigerian scam artists. The sole intention of those operating an internet love scam is to stiff hopeful romantics out of their money. Where there is certainly nothing wrong with finding a date online, beware of creating a virtual relationship with someone which never intends to meet you because they live in a far off land (this is a key characteristic of an internet love scam).

All about Internet Love Scams

Internet love scam operators never plan on meeting their victims. Their internet love scams are often successful because they build a lengthy virtual relationship with their victims and declare that they’ve fallen in love. Once love has been declared, you can rest assured that the internet love scam operator will ask for money sooner or later. Sometimes, those who operate internet love scams will ask for money (typically at least $1,000) just weeks after declaring their love. However, the more tactfully operated internet love scams wait a minimum of 3 to 6 months to over a year to build trust within their “relationship” and only then will they go in for the kill.

In order to protect yourself from internet love scams, you should heavily consider running a background check on everyone you plan on building an internet relationship with. In addition to a background check you should also ask many questions to the potential dates you mingle with through dating websites. Ask in-depth questions about their history, family and educational background. These are questions that can be answered easily by those that aren’t operating internet love scams. If you need to report internet love scams, contact internet-love-scams.org.

          

Say NO to Internet Scam Fraud

Avoiding Internet Scam Fraud

Internet scam fraud is on the rise. It pays to be cautious about what you do online when you’re on the internet. It pays to be cautious about who you interact with and which websites you visit when you’re online. The internet is a very large network; so, it’s only natural for it to be considered the playground for scammers. Below, you’ll find a few steps to avoid internet scam fraud and which organizations to contact in case you do come across a few internet fraud scams.

Know how to Avoid Internet Scam Fraud

Avoiding internet scam fraud isn’t as difficult as many people make it out to be. The only true way to avoid being dragged into an internet scam fraud is to keep your guard up. Because those that operate internet fraud scams tend to target their victims through email, increasing your spam guard is necessary in avoiding internet scam fraud. Add your friends, family and coworkers to your email address book to ensure that you receive their emails. This will ensure that you receive the emails the emails from those you know and will minimize the chances of being contacted by a scammer that is running an internet scam fraud.

When navigating websites, sometimes you’ll encounter a few internet fraud scams. Though they will be disguised and difficult to identify, you’ll be able to protect yourself from the internet scam fraud. Do not download any photos, music or any other free downloads associated with any website. Many download files include Trojan viruses that will invade your computer and the internet fraud scam operators will be able to access your computer files and crash your computer when they’re done. If you need to report a scam or fraud, contact the FTC (Federal Trade Commission) or the IC3 (an organization operated by the FBI). Scam Fraud’s links to each place.

          

Watch out for the internet email scammer

The Modern-day Internet Email Scam

If you think you’re too savvy to get caught up in an internet email scam, think again. Internet email scams aren’t just targeted towards those that are new to browsing the internet and maneuvering through their emails. Sure, there are still many internet email scam letters floating around that promise riches and a new lifestyle. However, the scammers behind the modern-day internet email scam are toning down their grandiose offers and being a little more discreet in their covert operations. Below, you’ll learn the common tactics modern-day internet email scam artist use to steal your money!

Popular Modern-day Internet Email Scams

Some of the most successful internet email scam letters don’t offer you much at all. In fact, the most successful internet email scam is the bank phishing scam. This internet email scam will alert you that suspicious activity has been taking place within your bank account and prompt you to sign in to your bank account using the internal link provided. Of course, when you click on the link and input your information, you’re simply giving away your account number and password to the internet email scam operator. The sign in page is a fake and was designed to look identical to the one your bank uses.

Another extremely successful internet email scam is the hoax scam. Internet hoax scams will alert you that an internet user has been searching for sensitive information about you. You can easily access the name and contact information of the person that ran the search by paying a small fee to gain access into website’s exclusive database. In the end, it is an internet email scam; if you pay the fee you won’t be given any valuable information. If you’ve received an internet email scam which details bank fraud, contact your bank personally to confirm or deny the breach of your account. If you’re told that someone is searching for your information, simply ignore it; it’s most likely an internet email scam.